Ex Parte Batoff

Board of Patent Appeals and Interferences

Aug 6, 2009

10085394 (B.P.A.I. Aug. 6, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte JEFFREY BATOFF
____________

Appeal 2009-002346
Application 10/085,394
Technology Center 3600
____________

Decided: August 6, 2009

Before HUBERT C. LORIN, JOSEPH A. FISCHETTI, and
BIBHU R. MOHANTY, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL
Appeal 2009-2346
Application 10/085,394

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STATEMENT OF THE CASE
The Appellant seeks our review under 35 U.S.C. § 134 (2002) of the
final rejection of claims 63, 69, 87-90, 110, 112, 113, 115, 116, 118-120,
and 188-263 which are all the claims pending in the application. We have
jurisdiction under 35 U.S.C. § 6(b) (2002).

SUMMARY OF THE DECISION
We REVERSE.

THE INVENTION
The Appellant’s claimed invention is directed a method and system
for providing a first end user with the ability to engage in the swap of at least
one item with at least a second end user comprising the following steps:
entering a first item to be swapped in an inventory of the system by the first
end user; and determining and providing a fixed number of credits for said
item by said system based upon the characteristics of said item which can
then be used by the first end user to purchase a second item placed by said
second end user. (Spec. 4). Claim 63, reproduced below, is representative of
the subject matter of appeal.

63. A method of operating an electronic barter system for facilitating
consumer to consumer bartering transactions, comprising:
a first consumer user listing item(s) on the electronic barter system;
the electronic barter system determining and awarding to said first
consumer user an amount of barter credit for' said listed item(s);
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the electronic barter system identifying at least one item that has been
listed on said electronic barter system by other' consumer user(s) that
may be desirous to said first user;
the first consumer' user' selecting a desired item via the electronic
barter system;
the electronic barter system permitting at least a portion of said barter'
credit to be used by said first consumer user toward the acquisition of
said desired item, the electronic barter system permitting the first
consumer user to acquire an item from another' consumer user where
it is not required that the other consumer user acquire any item from
the first consumer user; and
the electronic barter system communicating a request to the consumer
user who listed the desired item that the consumer user who listed the
desired item surrender said desired item.

THE REJECTIONS
The Examiner relies upon the following as evidence in support of the
rejections:
Postrel US 2004/0098317 A1 May 20, 2004

The following rejections are before us for review:
1. Claims 63, 69, 87-90, 110, 112, 113, 115, 116, 118-120, and
188-263 are rejected under 35 U.S.C. § 103(a) as unpatentable over Postrel.

THE ISSUE
At issue is whether the Appellants have shown that the Examiner
erred in making the aforementioned rejections.
This issue turns on whether it would have been obvious to one of
ordinary skill in the art at the time of the invention to modify the Postrel
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reference to facilitate consumer to consumer transactions and have “the
electronic barter system identifying at least one item that has been listed on
said electronic barter system by other' consumer user(s) that may be desirous
to said first user.”

FINDINGS OF FACT
We find the following enumerated findings of fact (FF) are supported
at least by a preponderance of the evidence:1
FF1. Postrel discloses a system for electronic barter, trading, and
redeeming points accumulated in reward programs (Title).
FF2. Postrel discloses that a user earns reward points from a plurality of
issuing entities which are stored in a rewards server. The user then may
select an item for purchase from a merchant interconnected to the network
and the trading server then reduces the number of points in the user’s
account (Abstract).
FF3. Postrel discloses that a single user 40 interacts with a variety of
reward merchants (Fig. 4).
FF4. Postrel does not disclose consumer to consumer transactions in the
system.
FF5. Postrel does not disclose the electronic barter system identifying at
least one item that has been listed on the electronic barter system by other
consumer user(s) that may be desirous to the first user.

1 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
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PRINCIPLES OF LAW
“Section 103 forbids issuance of a patent when ‘the differences
between the subject matter sought to be patented and the prior art are such
that the subject matter as a whole would have been obvious at the time the
invention was made to a person having ordinary skill in the art to which said
subject matter pertains.’” KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406
(2007). The question of obviousness is resolved on the basis of underlying
factual determinations including (1) the scope and content of the prior art,
(2) any differences between the claimed subject matter and the prior art, (3)
the level of skill in the art, and (4) where in evidence, so-called secondary
considerations. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). See
also KSR, 550 U.S. at 407 (“While the sequence of these questions might be
reordered in any particular case, the [Graham] factors continue to define the
inquiry that controls.”)
In KSR, the Supreme Court emphasized “the need for caution in
granting a patent based on the combination of elements found in the prior
art,” id. at 415-16, and discussed circumstances in which a patent might be
determined to be obvious. In particular, the Supreme Court emphasized that
“the principles laid down in Graham reaffirmed the ‘functional approach’ of
Hotchkiss, 11 How. 248.” KSR, 550 U.S. at 415, (citing Graham, 383 U.S.
at 12), and reaffirmed principles based on its precedent that “[t]he
combination of familiar elements according to known methods is likely to be
obvious when it does no more than yield predictable results.” Id. at 416.
The Court also stated “[i]f a person of ordinary skill can implement a
predictable variation, § 103 likely bars its patentability.” Id. at 417. The
operative question in this “functional approach” is thus “whether the
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improvement is more than the predictable use of prior art elements according
to their established functions.” Id.
The Court noted that “[t]o facilitate review, this analysis should be
made explicit.” Id. at 418 (citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir.
2006) (“[R]ejections on obviousness grounds cannot be sustained by mere
conclusory statements; instead, there must be some articulated reasoning
with some rational underpinning to support the legal conclusion of
obviousness”). However, “the analysis need not seek out precise teachings
directed to the specific subject matter of the challenged claim, for a court
can take account of the inferences and creative steps that a person of
ordinary skill in the art would employ.” Id.

ANALYSIS
The Appellant argues that the rejection of claim 63 is improper
because “Postrel simply does not have a consumer listing items to facilitate
consumer to consumer commerce” (Br. 11). The Appellant argues that
Postrel is directed instead to redeeming points obtained from a credit or
airline system (Br. 11). Specifically, the Appellant argues that Postrel does
not have “a first consumer user listing item(s) on the electronic barter
system” or “the electronic barter system identifying at least one item that has
been listed on the electronic barter system by other consumer user(s) that
may be desirous to said first user” (Br. 11). The Appellant has argued that
the Examiner has failed to provide any reason why one of ordinary skill in
the art would modify Postrel to enable consumer to consumer transactions or
how such a modification would take effect (Br. 12).
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In contrast the Examiner has determined that Postrel discloses a
method of electronic barter that includes listing items (considered to be
awards or credits) on the system and having the user select a desired item via
the barter system (Ans. 3-4). The Examiner has determined that “it would
be an obvious matter of design choice” that the users could be of various
types such as consumers, retailers, and middlemen. The Examiner has
determined that it would have been obvious to have consumer to consumer
enabled transfer of goods and services (Ans. 4).
We agree with the Appellant. Postrel discloses that a user earns
reward points from a plurality of issuing entities which are stored in a
rewards server (FF2). In Postrel the user then may select an item for
purchase from a merchant interconnected to the network and the trading
server reduces the number of points in the user’s account (FF2). In Postrel a
single user 40 interacts with a variety of reward merchants (FF3). Postrel
does not disclose consumer to consumer transactions in the system (FF4)
and the Examiner has not disputed this. Postrel also does not disclose or
suggest the electronic barter system identifying at least one item that has
been listed on the electronic barter system by other consumer user(s) that
may be desirous to the first user (FF5). The modification of the Postrel to
have consumer to consumer transactions and to have “the electronic barter
system identifying at least one item that has been listed on the electronic
barter system by other consumer user(s) that may be desirous to said first
user” lacks an articulated reasoning with some rational underpinning to
support the legal conclusion of obviousness. There is no articulated
reasoning or motivation to modify the Postrel reference to contain the recited
claim limitations without impermissible hindsight despite the Examiner’s
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assertion that such a modification is “an obvious design choice”. For these
reasons the rejection of claim 63 is not sustained. The Appellant has
provided similar arguments for claims 188, 200, 212, 224, 235, 247, 250,
and 253 which contain limitations similar to those in claim 63 and for the
same reasons given above, the rejection of these claims is also not sustained.
The rejection of dependent claims 69, 87-90, 110, 112, 113, 115, 116, 118-
120, 189-199, 201-211, 213-223, 225-234, 236-246, 248-249, 251-252, and
254-263 is not sustained for these same reasons as well.

CONCLUSIONS OF LAW
We conclude that Appellant has shown that the Examiner erred in
rejecting claims 63, 69, 87-90, 110, 112, 113, 115, 116, 118-120, and 188-
263 under 35 U.S.C. § 103(a) as unpatentable over Postrel.

DECISON
The Examiner’s rejection of claims 63, 69, 87-90, 110, 112, 113, 115,
116, 118-120, and 188-263 is reversed.

REVERSED

MP

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