Ex Parte Aoyama et al

Board of Patent Appeals and Interferences

Nov 17, 2009

10798505 (B.P.A.I. Nov. 17, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
___________ 2
3
BEFORE THE BOARD OF PATENT APPEALS 4
AND INTERFERENCES 5
___________ 6
7
Ex parte KEISUKE AOYAMA, KOJIRO TOYOSHIMA, and 8
YOSHITAKA EZAKI 9
___________ 10
11
Appeal 2009-006755 12
Application 10/798,505 13
Technology Center 3600 14
___________ 15
16
Decided: November 17, 2009 17
___________ 18
19
Before MURRIEL E. CRAWFORD, HUBERT C. LORIN, and ANTON W. 20
FETTING, Administrative Patent Judges. 21
FETTING, Administrative Patent Judge. 22
DECISION ON APPEAL 23
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STATEMENT OF THE CASE 1
Keisuke Aoyama, Kojiro Toyoshima, and Yoshitaka Ezaki (Appellants) 2
seek review under 35 U.S.C. § 134 (2002) of a final rejection of claims 11-3
14, 21-36, and 38, the only claims pending in the application on appeal. 4
We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b) 5
(2002). 6
SUMMARY OF DECISION1 7
We AFFIRM-IN-PART. 8
THE INVENTION 9
The Appellants invented a way of distribution change management that 10
allows a single entity to control distribution through warehouses controlled 11
by multiple entities. (Specification 1:¶ 001). 12
An understanding of the invention can be derived from a reading of 13
exemplary claims 11 and 26, which are reproduced below [bracketed matter 14
and some paragraphing added]. 15
11. A system for supply chain management comprising: 16

1 Our decision will make reference to the Appellants’ Appeal Brief (“App.
Br.,” filed February 23, 2007) and Reply Brief (“Reply Br.,” filed February
3, 2009), and the Examiner’s Answer (“Answer,” mailed December 24,
2008).
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[1] an order controller system 1
including reverse logistics means for generating transfer 2
data; and 3
[2] a warehouse system 4
receiving the transfer data and generating shipping data. 5
26. A method for supply chain management comprising: 6
[1] receiving 7
warehouse inventory data and 8
distribution center inventory data and 9
generating reverse logistics data 10
to modify a distribution of inventory at a first warehouse 11
and a second warehouse; 12
[2] receiving the reverse logistics data 13
at a first warehouse system and 14
generating shipping data; and 15
[3] receiving the reverse logistics data 16
at a second warehouse system and 17
generating shipping data. 18
THE REJECTIONS 19
The Examiner relies upon the following prior art: 20
Yang US 2001/0034673 A1 Oct. 25, 2001
Singh US 2002/0169657 A1 Nov. 14, 2002
Claims 26-36 and 38 stand rejected under 35 U.S.C. § 101 as directed to 21
non-statutory subject matter. 22
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Claims 11-14, 21-24, 26, and 31 stand rejected under 35 U.S.C. § 102(a) 1
as anticipated by Yang. 2
Claims 25, 27-30, and 32-36 stand rejected under 35 U.S.C. § 103(a) as 3
unpatentable over Yang and Singh. 4
Claim 38 stands rejected under 35 U.S.C. § 103(a) as unpatentable over 5
Yang. 6
ARGUMENTS 7
Claims 26-36 and 38 rejected under 35 U.S.C. § 101 as directed to non-8
statutory subject matter. 9
The Examiner raised this rejection for the first time in the Answer at 3-5, 10
finding that these claims failed the Bilski machine or transformation test. 11
The Appellants argue that the claims require the use of data processing 12
equipment and transform the location of inventory. Reply Br. 9-13. 13
Claims 11-14, 21-24, 26, and 31 rejected under 35 U.S.C. § 102(a) as 14
anticipated by Yang. 15
The Appellants argue several limitations as missing from Yang in claims 16
11-13, 21-24, 26, and 31. The principal argument regarding independent 17
claims 11 and 26 is with regard to the reverse logistics means and data. 18
App. Br. 11-18. 19
Claims 25, 27-30, and 32-36 rejected under 35 U.S.C. § 103(a) as 20
unpatentable over Yang and Singh. 21
Claim 38 rejected under 35 U.S.C. § 103(a) as unpatentable over Yang. 22
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The Appellants argue the Examiner failed to present a prima facie basis 1
for these rejections. App. Br. 18-22). 2
3
ISSUES 4
The issue of whether the Appellants have sustained their burden of 5
showing that the Examiner erred in rejecting claims 26-36 and 38 under 35 6
U.S.C. § 101 as directed to non-statutory subject matter turns on whether the 7
claims transform something or are tied to a particular machine or apparatus. 8
The issue of whether the Appellants have sustained their burden of 9
showing that the Examiner erred in rejecting claims 11-14, 21-24, 26, and 31 10
under 35 U.S.C. § 102(a) as anticipated by Yang turns on the construction of 11
reverse logistics means and whether Yang describes the argued limitations. 12
The issues of whether the Appellants have sustained their burden of 13
showing that the Examiner erred in rejecting claims 25, 27-30, and 32-36 14
under 35 U.S.C. § 103(a) as unpatentable over Yang and Singh and in 15
rejecting claim 38 under 35 U.S.C. § 103(a) as unpatentable over Yang turn 16
on the construction of reverse logistics means and whether the claims were 17
predictable to one of ordinary skill in view of the art. 18
FACTS PERTINENT TO THE ISSUES 19
The following enumerated Findings of Fact (FF) are believed to be 20
supported by a preponderance of the evidence. 21
Facts Related to Claim Construction 22
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01. The disclosure contains no lexicographic definition of “reverse 1
logistics.” 2
Facts Related to Appellants’ Disclosure 3
02. Figure 8 is a flowchart of a method 800 for reverse logistics in 4
accordance with an exemplary embodiment. Specification ¶ 0088. 5
Figure 8 contains a series of decision boxes each containing a 6
decision of whether to transfer product and if so, transferring 7
control to a box to generate shipping data. 8
03. There is no structure or algorithm for generating transfer data 9
disclosed in the discussion of Figure 8 at Specification 10
paragraphs’ 0088-93. These paragraphs do discuss generating 11
shipping data, but again without disclosing any structure or 12
algorithm for doing so. 13
04. The only disclosed apparatus for generating shipment data or 14
for receiving inventory data is a system for supply chain 15
management. Specification ¶ 0006. This shipping data can be 16
generated by order controller systems, warehouse systems and 17
distribution systems. Specification ¶ 0027. 18
05. The shipping data can be generated based upon order data, 19
order allocation data to warehouses, inventory data, and other 20
suitable data. Specification ¶ 0069. Thus, the basis for generating 21
shipping data is open ended. 22
Facts Related to the Prior Art 23
Yang 24
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06. Yang is directed to electronic commercial transactions and in 1
particular to an electronic marketplace providing service parts 2
inventory planning and management. Yang ¶ 0002. 3
07. Yang specifically describes reverse logistics. Yang describes a 4
growing requirement for many enterprises as the ability to better 5
manage the "reverse logistics" flow of service parts that are 6
defective or are otherwise returned for replacement or repair. The 7
flow of such aftermarket service parts may often provide a 8
valuable source of re-salable service parts, potentially reducing the 9
need to purchase or manufacture new service parts. Enterprises 10
which effectively manage reverse logistics flows can reduce their 11
costs significantly. Yang ¶ 0004. 12
08. Yang uses a parts inventory management system to control 13
parts inventory at many locations. Parts are transferred among 14
stocking locations to meet planned inventory needs. Yang’s 15
system receives inventory level data at one or more stocking 16
locations in a supply chain. Yang ¶ 0007. 17
09. Yang’s supply chain includes those that use, manufacture, 18
distribute or sell parts. Yang ¶ 0008. 19
10. Yang describes a "reverse logistics" or other returns supply 20
chain as used for eventual insertion of parts back into a supply 21
chain. Yang ¶ 0021. 22
11. Yang describes how excess inventory and inventory needed to 23
meet plans can be transferred among inventory stocking locations. 24
Yang ¶ 0037. 25
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12. Where traceability is important, traceability documents are 1
provided for parts transfers. Yang ¶ 0043. 2
13. Yang describes maintaining inventories and other information 3
for distribution centers and customer supply chains. Yang ¶ 0036. 4
14. Yang describes iterating inventory transfers until stocking 5
levels at one or more stocking locations within the supply chain 6
are consistent with the optimal inventory plan. Yang ¶ 0053. 7
15. Yang describes how an internal distribution network of a supply 8
chain forms an internal warehouse hierarchy. The lower levels of 9
the warehouse hierarchy place demands on higher levels. There is 10
often a need to move inventory between distribution centers 11
within the supply chain to offset needs using excesses. 12
Distribution centers may need to be replenished from outside the 13
internal warehouse hierarchy of distributor if a distribution center 14
at a first level cannot meet the demand from one or more 15
distribution centers at a second higher level. Distribution centers 16
at the second level may need to procure service parts from outside 17
supply chain due to the lack of supply from the distribution center 18
at the first level. A primary difference between reliance on other 19
distribution centers within the supply chain and reliance on such 20
"out-of-network" sources is the lack of visibility into and control 21
over inventory associated with the "out-of-network" sources. 22
Yang ¶ 0019-20. 23
Singh 24
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16. Singh is directed to supply chain planning and demand 1
forecasting for proactively predicting demand across multiple 2
levels of the supply chain so as to avoid costly mismatches of 3
demand and supply. Singh ¶ 0002. 4
17. Singh describes taking new product promotions into 5
consideration for planning inventory levels. Singh ¶’s 0080 – 82. 6
Facts Related To The Level Of Skill In The Art 7
18. Neither the Examiner nor the Appellants have addressed the 8
level of ordinary skill in the pertinent arts of systems analysis and 9
programming, inventory controls systems and distribution system 10
design. We will therefore consider the cited prior art as 11
representative of the level of ordinary skill in the art. See Okajima 12
v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001) (“[T]he 13
absence of specific findings on the level of skill in the art does not 14
give rise to reversible error ‘where the prior art itself reflects an 15
appropriate level and a need for testimony is not shown’”) 16
(quoting Litton Indus. Prods., Inc. v. Solid State Sys. Corp., 755 17
F.2d 158, 163 (Fed. Cir. 1985). 18
19. One of ordinary skill knew that any inventory management 19
system that tracked parts at various locations necessarily had to 20
document transfers or shipments among locations to accurately 21
maintain inventory data. 22
PRINCIPLES OF LAW 23
Patentable Subject Matter – Statutory Processes 24
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The law in the area of patent-eligible subject matter for process claims 1
has recently been clarified by the Federal Circuit in, In re Bilski, 545 F.3d 2
943, 950-952 (Fed. Cir. 2008) (en banc), cert. granted, 77 USLW 3442 3
(U.S. Jun. 1, 2009) (NO. 08-964). 4
The en banc court in Bilski held that "the machine-or-transformation test, 5
properly applied, is the governing test for determining patent eligibility of a 6
process under 101." Bilski, 545 F.3d at 956. The court in Bilski further held 7
that "the 'useful, concrete and tangible result' inquiry is inadequate [to 8
determine whether a claim is patent-eligible under 101.]" Bilski, 545 F.3d at 9
959-60. 10
The court explained the machine-or-transformation test as follows: "A 11
claimed process is surely patent-eligible under 101 if: (1) it is tied to a 12
particular machine or apparatus, or (2) it transforms a particular article into a 13
different state or thing." Bilski, 545 F.3d at 954 (citations omitted). The court 14
explained that "the use of a specific machine or transformation of an article 15
must impose meaningful limits on the claim's scope to impart patent-16
eligibility" and "the involvement of the machine or transformation in the 17
claimed process must not merely be insignificant extra-solution activity." 18
Bilski, 545 F.3d at 961- 62 (citations omitted). As to the transformation 19
branch of the inquiry, the court explained that transformation of a particular 20
article into a different state or thing "must be central to the purpose of the 21
claimed process." Id. 22
Anticipation 23
"A claim is anticipated only if each and every element as set forth in the 24
claim is found, either expressly or inherently described, in a single prior art 25
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reference." Verdegaal Bros. v. Union Oil Co. of California, 814 F.2d 628, 1
631 (Fed. Cir. 1987). "When a claim covers several structures or 2
compositions, either generically or as alternatives, the claim is deemed 3
anticipated if any of the structures or compositions within the scope of the 4
claim is known in the prior art." Brown v. 3M, 265 F.3d 1349, 1351 (Fed. 5
Cir. 2001). "The identical invention must be shown in as complete detail as 6
is contained in the ... claim." Richardson v. Suzuki Motor Co., 868 F.2d 7
1226, 1236 (Fed. Cir. 1989). The elements must be arranged as required by 8
the claim, but this is not an ipsissimis verbis test, i.e., identity of terminology 9
is not required. In re Bond, 910 F.2d 831, 832 (Fed. Cir. 1990). 10
Obviousness 11
A claimed invention is unpatentable if the differences between it and 12
the prior art are “such that the subject matter as a whole would have been 13
obvious at the time the invention was made to a person having ordinary skill 14
in the art.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007); Graham 15
v. John Deere Co., 383 U.S. 1, 13-14 (1966). 16
In Graham, the Court held that that the obviousness analysis is 17
bottomed on several basic factual inquiries: “[(1)] the scope and content of 18
the prior art are to be determined; [(2)] differences between the prior art and 19
the claims at issue are to be ascertained; and [(3)] the level of ordinary skill 20
in the pertinent art resolved.” Graham, 383 U.S. at 17. See also KSR, 550 21
U.S. at 406. “The combination of familiar elements according to known 22
methods is likely to be obvious when it does no more than yield predictable 23
results.” KSR, 550 U.S. at 416. 24
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ANALYSIS 1
Claims 26-36 and 38 rejected under 35 U.S.C. § 101 as directed to non-2
statutory subject matter. 3
We apply the machine-or-transformation test, as described in Bilski, to 4
determine whether the subject matter of process claims 26-36 and 38 are 5
patent-eligible under 35 U.S.C. § 101. 6
Process claims 26-36 and 38 recite a series of process steps that are not 7
tied in any manner to a machine. In other words, these claims do not limit 8
the process steps to any specific machine or apparatus. Each of the steps 9
receives and generates data. The steps do not recite any machine or 10
algorithm for receiving and generating such data. The Appellants argue that 11
the claims require the use of data processing equipment (Reply Br. 10), but 12
no such equipment is recited in the claims. Thus, the claims fail the first 13
prong of the machine-or-transformation test because they are not tied to a 14
particular machine or apparatus. The steps of these process claims also fail 15
the second prong of the machine-or-transformation test because the data 16
does not represent physical and tangible objects.2 Rather, the data represents 17
information about inventory, which is an asset category rather than any 18
specific physical item. Inventory data may be no more than item identifiers, 19
which themselves are intangible. Thus, the processes of claims 26-36 and 20
38 fail the machine-or-transformation test and are not patent-eligible under 21
35 U.S.C. § 101. 22

2 Because the data does not represent physical and tangible objects, we need
not reach the issue of whether mere calculation of a number based on inputs
of other numbers is a sufficient “transformation” of data to render a process
patent-eligible under § 101.
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1
2
3
Claims 11-14, 21-24, 26, and 31 rejected under 35 U.S.C. § 102(a) as 4
anticipated by Yang. 5
Claim 11. 6
The Appellants argue that Yang fails to describe a reverse logistics 7
means as described by process 800 in the Specification. Claim 11 specifies 8
that the reverse logistic means is for generating transfer data. This limitation 9
is expressed as a means plus function, and the Appellants have confirmed 10
that the limitation is to be construed as such. App. Br. 12-13. 11
The first step in construing a means-plus-function claim 12
limitation is to define the particular function of the claim 13
limitation. Budde v. Harley-Davidson, Inc., 250 F.3d 1369, 14
1376 (Fed.Cir.2001). “The court must construe the function of a 15
means-plus-function limitation to include the limitations 16
contained in the claim language, and only those limitations.” 17
Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 296 F.3d 1106, 18
1113 (Fed.Cir.2002). [] Ordinary principles of claim 19
construction govern interpretation of this claim language, see 20
id., []. 21
The next step in construing a means-plus-function claim 22
limitation is to look to the specification and identify the 23
corresponding structure for that function. “Under this second 24
step, ‘structure disclosed in the specification is “corresponding” 25
structure only if the specification or prosecution history clearly 26
links or associates that structure to the function recited in the 27
claim.’ ” Med. Instrumentation & Diagnostics Corp. v. Elekta 28
AB, 344 F.3d 1205, 1210 (Fed.Cir.2003) (quoting B. Braun 29
Med. Inc. v. Abbott Labs., 124 F.3d 1419, 1424 (Fed.Cir.1997)). 30
31
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Golight Inc. v. Wal-Mart Stores Inc., 355 F.3d 1327, 1333-34 (Fed. Cir. 1
2004). 2
3
The reverse logistics means then must be construed to cover the 4
corresponding structure, material, or acts described in the specification and 5
equivalents for performing the recited function, viz. generating transfer data. 6
The claim does not further narrow the nature of the transfer data, nor the 7
manner of generation. The Appellants cite the disclosure regarding 8
reference 800 in Fig. 8 and paragraphs 0088-93 in the Specification as 9
showing the support for the claimed me Answer App. Br. 7 and 13. We 10
construe the function of generating transfer data according to its plain 11
meaning, which is creating data concerned with some transfer. 12
We agree that Fig. 8 portrays an exemplary embodiment of a reverse 13
logistics method. FF 02. However, the only disclosure related to generating 14
transfer data is the set of steps labeled as generating shipping data. FF 02 - 15
03. The disclosed structure for generating shipping data is a system for 16
supply chain management that might contain order controller, warehouse, or 17
distribution systems for generating such shipping data. FF 04. Thus the 18
issue is whether Yang describes such a system for generating shipping data. 19
The Appellants argue that Yang fails to describe receiving warehouse 20
and distribution inventory data, comparing warehouse and distribution center 21
data, and determining whether to transfer product as in the Fig. 8 flowchart. 22
All of these functions argued by the Appellants are beyond generating 23
transfer data, and thus “are superfluous to our claim construction analysis 24
because they are not required for performing the claimed function.” Id. 25
While these functions may decide which data to generate, they are separate 26
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from the function of generating that data once decided. The flowchart in the 1
Appellants’ Fig. 8 implicitly acknowledges this dichotomy my presenting 2
the generation in boxes separate from the decisions. 3
The Examiner found that Yang described a reverse logistics process in 4
an inventory management system. Answer 5. We agree that Yang describes 5
an inventory management system (FF 08) and a reverse logistics process 6
with that system (FF 07 & 10). Parts are transferred among locations within 7
the system according to decisions based on planned needs and actual levels. 8
FF 08 & 11. One of ordinary skill knew that any inventory management 9
system that tracked parts at various locations had to document transfers or 10
shipments among locations. FF 19. Thus, we agree with the Examiner that 11
Yang described a reverse logistics process in a distribution system that had 12
structure equivalent to that disclosed in the Specification for generating 13
transfer data. As this is the only issue argued with regard to claim 11, this is 14
dispositive. 15
Claims 12 and 21. 16
Claim 12 further requires a distribution system receiving the transfer 17
data and generating shipping data. The Examiner found that Yang’s 18
inventory management system did so. Answer 6. The Appellants argue that 19
Yang’s reverse logistics data is not transfer data. The Appellants first 20
contend that reverse logistics within the claims is defined as process 800. 21
App. Br. 13. We do not agree, since the Specification provides no definition 22
of reverse logistics (FF 01) and the reverse logistics process shown as 23
reference 800 in Fig. 8 is an exemplary embodiment only. FF 02. 24
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The Appellants further contend that the reverse logistics disclosed is 1
hierarchical where Yang is not and that Yang fails to disclose structure that 2
facilitates product rollout. App. Br. 13-14. The pertinence of these 3
arguments is unknown since nothing in claim 12 refers to hierarchical 4
structures or product rollouts. Thus, we must disagree with the Appellants. 5
Claim 21 is another independent claim that again contains the reverse 6
logistics means limitation as in claim 11, but whose function also includes 7
receiving warehouse inventory data and distribution center inventory data. 8
As with generating data, the structure disclosed for receiving data is a 9
system for supply chain management that might contain an order controller, 10
a warehouse, or distribution systems. FF 04. As we found with claim 11, 11
Yang describes this. The Appellants again argue the absence of a 12
hierarchical distribution system (App. Br. 14) which is not pertinent in view 13
of the lack of any claim limitation regarding hierarchy. 14
Claim 13. 15
Claim 13 further requires the order controller system having an internal 16
warehouse order system receiving the shipping data and modifying internal 17
warehouse order data in response to the shipping data. The Examiner found 18
that Yang’s inventory management system did so. Answer 6. The 19
Appellants argue that Yang does not describe internal warehouses. App. Br. 20
14. We do not agree, since Yang describes multiple inventory locations (FF 21
08) and any inventory location warehouses inventory at that location. 22
Claims 14 and 22-24. 23
Claims 14 and 24 further require receiving the shipping data and 24
modifying inventory data in response to the shipping data. The Examiner 25
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found that Yang’s inventory management system did so. Answer 6 & 7. The 1
Appellants repeat their argument that Yang does not describe hierarchical 2
distribution (App. Br. 15-16) which is not pertinent in view of the lack of 3
any claim limitation regarding hierarchy. 4
Claims 14 and 22-24. 5
Claims 14 and 22-24 further require receiving the shipping data and 6
modifying inventory data in response to the shipping data. The Examiner 7
found that Yang’s inventory management system did so. Answer 6-7. The 8
Appellants repeat their argument that Yang does not describe hierarchical 9
distribution (App. Br. 15-16) which is not pertinent in view of the lack of 10
any claim limitation regarding hierarchy. 11
Claims 26 and 31. 12
The Appellants argue that Yang fails to describe warehouse or 13
distribution center inventory data, two separate generations of shipping data, 14
use of reverse logistics to generate shipping data, or even a warehouse in 15
independent method claim 26. App. Br. 16-17. The Examiner found that 16
Yang’s inventory management system did so. Answer 7-8. 17
The Appellants’ arguments appear to rely on two premises: (1) that the 18
reverse logistics data is generated in response to receiving warehouse 19
inventory data and distribution center data and that shipping data is 20
generated in response to reverse logistics data and (2) that Yang fails to 21
describe such transactions at a warehouse, being a long term storage facility. 22
We agree with the Examiner that the features upon which Appellant 23
relies, viz. the reverse logistics data generated in response to receiving data 24
and shipping data generated in response to reverse logistics data, are not 25
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recited in claim 26. Although the claims are interpreted in light of the 1
specification, limitations from the specification are not read into the claims. 2
See In re Van Geuns, 988 F.2d 1181, 1184-5 (Fed. Cir. 1993). Although 3
limitation [1] recites receiving warehouse and distribution center data and 4
generating reverse logistics data, nothing in that limitation recites any causal 5
connection between the two operations. Similarly, although limitations [2] 6
and [3] recite receiving reverse logistics data and generating shipping data, 7
nothing in those limitations recites any causal connection between the two 8
operations. 9
Clearly any reverse logistics data used by Yang to record receipts of 10
inventory requires accessing, i.e. receiving inventory quantity data to be 11
updated, fulfilling limitation [1], and any shipping data used to update 12
inventory data requires some inventory movement transaction that 13
necessitated the shipment. This sequence in Yang of receiving the inventory 14
data prior to generating reverse logistics data also answers the Appellants’ 15
follow up argument that Yang fails to use this sequence. Reply Br. 13. For 16
those transactions that involved Yang’s reverse logistics data, such reverse 17
logistics data are the transactional records to record that inventory 18
movement and which necessitate shipping data to record the movement, thus 19
fulfilling limitations [2] and [3]. 20
As to any distinction between a warehouse and a distribution center, 21
there is none so defined in the Specification. The Appellants cite 22
Specification ¶ 0056 (App. Br. 17), but this paragraph merely describes an 23
exemplary embodiment of a distribution system. Certainly, Yang describes 24
stocking locations (FF 08) used by manufacturers, distribution centers and 25
customers. FF 07 - 08. Stocking locations at customers, manufacturers and 26
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users would generally be considered warehouses, as they warehouse stock at 1
such locations. Yang also describes distribution centers. FF 13. Yang’s 2
system maintains transactions among various entities including these 3
stocking locations at customers, users, manufacturers, and distribution 4
centers. Yang also describes creating multiple shipments among stocking 5
locations. FF 14. Thus, Yang describes limitation [1] of receiving 6
warehouse and distribution center inventory data and limitations [2] and [3] 7
of generating shipping data. In those instances that the transaction involves 8
parts returns, Yang creates reverse logistics data. FF 07. Although the 9
Appellants contend the Examiner misconstrued the term reverse logistics 10
data (App. Br. 16), Yang explicitly recites using reverse logistics that creates 11
data for updating inventory levels. FF 07. Again, claim 26 recites no 12
specific connection between the reverse logistics data and the inventory data 13
and shipping data. Thus, we conclude that the Examiner did not err in 14
rejecting claim 26. 15
Claim 31 further requires giving priority in maintaining predetermined 16
inventory levels at a warehouse that is operated by an operator of a supply 17
chain management system relative to warehouses not so operated. The 18
Examiner found that Yang uses an internal warehouse and only looks to an 19
external warehouse when supply is unavailable internally. Answer 8. The 20
Appellants argue that this does not describe maintaining inventory levels at a 21
first relative to a second warehouse. Reply Br. 15. The Appellants appear to 22
be contending that because claim 31 incorporates the two warehouses from 23
claim 26, an external warehouse is irrelevant to the claim. 24
We agree with the Appellants. Yang’s system would not provide reverse 25
logistics information and create shipping information for a warehouse 26
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outside the system, if only by definition of a system. Thus, we agree with the 1
Appellants that as to this rejection, the inclusion of claim 31 was in error. 2
Claims 25, 27-30, and 32-36 rejected under 35 U.S.C. § 103(a) as 3
unpatentable over Yang and Singh. 4
Although the Appellants argue each of these claims individually, the 5
arguments are largely repeated among all these claims. These claims are 6
marked by the introduction of promotional product data, particularly for new 7
product roll outs. The Examiner applied Singh for these limitations. We 8
find that Singh does in fact describe taking new product promotions into 9
consideration for planning inventory levels. FF 17. The Appellants argue 10
that Singh is not directed to supply chain management and that neither 11
reference describes retail locations. App. Br. 18-21. As to whether Singh is 12
directed to supply chain management, 13
Claim 38 rejected under 35 U.S.C. § 103(a) as unpatentable over Yang. 14
Claim 38 further requires using regularly scheduled vehicles to transfer 15
inventory. The Examiner took official notice of the practice of using such 16
vehicles. Ans.10-11. The Appellants argue that it is not the use of such 17
vehicles per se that is the key limitation, but rather the limitations of claim 18
26, from which claim 38 depends. Reply Br. 21. We agree with the 19
Examiner that the use of regularly scheduled vehicles is notoriously well 20
known and was a predictable mode of transport, even for deliveries that were 21
unplanned, because the virtue of regular scheduling is that there will always 22
be a regularly scheduled vehicle available some time after an unplanned 23
need arises. As to claim 26, we found the Appellants’ argument 24
unpersuasive supra. 25
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CONCLUSIONS OF LAW 1
The Appellants have not sustained their burden of showing that the 2
Examiner erred in rejecting claims 26-36 and 38 under 35 U.S.C. § 101 as 3
directed to non-statutory subject matter. 4
The Appellants have not sustained their burden of showing that the 5
Examiner erred in rejecting claims 11-14, 21-24, and 26 under 35 U.S.C. § 6
102(a) as anticipated by Yang. 7
The Appellants have sustained their burden of showing that the 8
Examiner erred in rejecting claim 31 under 35 U.S.C. § 102(a) as anticipated 9
by Yang. 10
The Appellants have not sustained their burden of showing that the 11
Examiner erred in rejecting claims 25, 27-30, and 32-36 under 35 U.S.C. § 12
103(a) as unpatentable over Yang and Singh. 13
The Appellants have not sustained their burden of showing that the 14
Examiner erred in rejecting claim 38 under 35 U.S.C. § 103(a) as 15
unpatentable over Yang. 16
DECISION 17
To summarize, our decision is as follows. 18
• The rejection of claims 26-36 and 38 under 35 U.S.C. § 101 as 19
directed to non-statutory subject matter is sustained. 20
• The rejection of claims 11-14, 21-24, and 26 under 35 U.S.C. § 102(a) 21
as anticipated by Yang is sustained. 22
Appeal 2009-006755
Application 10/798,505

22
• The rejection of claim 31 under 35 U.S.C. § 102(a) as anticipated by 1
Yang is not sustained. 2
• The rejection of claims 25, 27-30, and 32-36 under 35 U.S.C. § 103(a) 3
as unpatentable over Yang and Singh is sustained. 4
• The rejection of claim 38 under 35 U.S.C. § 103(a) as unpatentable 5
over Yang is sustained. 6
No time period for taking any subsequent action in connection with this 7
appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). 8
9
AFFIRMED-IN-PART 10
11
12
13
mev 14
Address 15
MR. CHRISTOPHER JOHN ROURK 16
JACKSON WALKER LLP 17
901 MAIN STREET, SUITE 6000 18
DALLAS TX 75202 19