Ex Parte Benson

Board of Patent Appeals and Interferences

Apr 16, 2008

10004296 (B.P.A.I. Apr. 16, 2008)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte THOMAS D. BENSON
____________

Appeal 2008-0766
Application 10/004,296
Technology Center 3600
____________

Decided: April 16, 2008
____________

Before MURRIEL E. CRAWFORD, JENNIFER D. BAHR, and LINDA E.
HORNER, Administrative Patent Judges.

HORNER, Administrative Patent Judge.

DECISION ON APPEAL

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Application 10/004,296

STATEMENT OF THE CASE
Thomas D. Benson (Appellant) seeks our review under 35 U.S.C.
§ 134 of the rejection of claims 21-24. Claims 21-29 are pending in the
application, and claims 25-29 have been withdrawn from consideration. We
have jurisdiction under 35 U.S.C. § 6(b) (2002).

SUMMARY OF DECISION
We AFFIRM.

THE INVENTION
The Appellant’s claimed invention is to a system for inventory
management control. Claim 21, reproduced below, is representative of the
subject matter on appeal.
21. An inventory control system, said system
comprising:
a processor operable to determine a required
quantity of material;
a means for communicating with at least one
supplier of said material, wherein said
communication includes conveying to said at least
one supplier said quantity and a time frame and
receiving from said at least one supplier a
confirmation;
computer readable code processed by said
processor, wherein said code is operable to re-
determine said required quantity using feedback
relating to a performance of at least one supply
chain participant.

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THE REJECTIONS
The Examiner relies upon the following as evidence of
unpatentability:
Graves SIR H1743 Aug. 4, 1998
Gung US 6,816,839 B1 Nov. 9, 2004
The following rejections are before us for review:
1. Claims 21-24 are rejected under 35 U.S.C. § 112, second paragraph,
as indefinite for failing to particularly point out and distinctly claim
the subject matter of the invention.
2. Claims 21, 22, and 24 are rejected under 35 U.S.C. § 102(b) as
anticipated by Graves.
3. Claims 21-24 are rejected under 35 U.S.C. § 103(a) as unpatentable
over Graves and Gung.

ISSUES
The Examiner found that the use of the term “performance” in the
claim 21 is unclear (Ans. 3). The Appellant contends that the Examiner has
“mistaken breadth for indefiniteness” (App. Br. 4). The issue before us is
whether the Appellant has shown that the Examiner erred in rejecting claims
21-24 under 35 U.S.C. § 112, second paragraph. This issue turns on whether
one having ordinary skill in the art would understand what is meant by
“performance” when the claim is read in light of the specification.
The Examiner also found that Graves discloses code operable to
re-determine a required quantity using feedback relating to a performance of
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at least one supply chain participant, as recited in claim 21, that the feedback
includes a comparison between an actual run rate and a corresponding
anticipated run rate, as recited in claim 22, and a product forecast, as recited
in claim 24 (Ans. 4). The Appellant argues that Graves’s monitoring of
storage tank level is not information regarding the performance of a supply
chain participant, “a tank level is not a run rate,” and “revaluating projected
tank levels is not the same as determining a quantity using one or more of a
product forecast, a bill of materials, a material lead time, and a desired
inventory level” (App. Br. 5-6). The issue before us is whether Appellants
have shown that the Examiner erred in rejecting claims 21, 22, and 24 as
anticipated by Graves.
The Examiner also concluded that the subject matter of claims 21-24
would have been obvious to one having ordinary skill in the art, because
Gung discloses forecasting demand based upon performance, and one would
have been motivated to use the model-based value of Gung to set the
threshold of the feedback system in Graves to make it have a more efficient
target (Ans. 5). The Appellant argues that the Examiner’s motivation
reasoning is circular, modifying the system of Graves would render Graves
unfit for its intended purpose, and Gung does not teach “forecasting demand
based upon performance” (App. Br. 7-9). The issue before us is whether the
Appellant has shown that the Examiner erred in determining that the
combination of Graves and Gung render obvious the subject matter of
claims 21-24.
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FINDINGS OF FACT
We find that the following enumerated findings are supported by at
least a preponderance of the evidence. Ethicon, Inc. v. Quigg, 849 F.2d
1422, 1427 (Fed. Cir. 1988) (explaining the general evidentiary standard for
proceedings before the Office).
1. The customary meaning of “performance” is the way in which
someone or something functions. The American Heritage
Dictionary of the English Language (4th ed. 2000), found at
www.bartelby.com.
2. The Appellant’s Specification does not provide a definition of
“performance” or use the term in any way contrary to its ordinary
and customary meaning.
3. The Appellant’s Specification describes “[t]he comparison
between actual run rate and anticipated run rate, actual and
expected product yield and the evaluation and possible adjustment
of inventory levels and forecasts is preferably used to provide
feedback for use in the determination of the material order in step
104” (Spec. 5: third paragraph).
4. Graves is directed to a method and apparatus for monitoring the
inventory of materials used in the manufacture of finished
products, and the ordering (replenishment) of used materials
(Graves, col. 1, ll. 7-10).
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5. In the example provided in Graves, a paper mill manufacturer is
the “customer” and a supplier supplies chemicals to the
manufacturer for use in the manufacture of paper (Graves, col. 4,
ll. 47-52).
6. Graves discloses an inventory management apparatus 10
comprising a sensor 100, associated with a storage tank 102, and a
processing unit 106 (Graves, col. 4, ll. 63-66).
7. The processing unit 106 executes a specially designed “program,”
which necessary must be made up of computer readable code.
(Graves, col. 7, ll. 64-65).
8. In one embodiment, a projected storage tank level is compared to
the actual level once every three hours and if the difference
between the actual and predicted levels exceed a predetermined
threshold, the projected levels are re-calculated using the last three
hour flow rate, the delivery schedule for new chemicals is adjusted
accordingly, and a facsimile is issued to the supplier to reflect the
changed delivery schedule (Graves, col. 17, ll. 28-39).
9. The level of chemicals in the tank corresponds to the “rate at which
the chemical in the storage tank is being consumed” which is
directly related to the run rate of the paper mill (Graves, col. 7,
ll. 35-38).
10. Graves’s inventory management system 10 predicts storage tank
product levels based on forecasted and actual usage rates by
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comparing projected usage level to actual usage level (Grave,
col. 10, l. 59 – col. 11, l. 9).
11. The actual usage level is provided by feedback from sensor 100 to
processing unit 106 (Graves, col. 5, ll. 5-27).
12. Gung discloses a method for forecasting the demand of products
with multiple options, to be used for establishing an efficient
supply chain management framework by providing an accurate
demand forecast of each attachment (Gung, col. 1, ll. 7-11).
13. Gung teaches that “the forecasted demand is not always accepted
as is, rather adjusted afterwards based on external constraints
including price change, inventory status, and competitors [sic]
performance” (Gung, col. 3, ll. 16-19).
14. As such, Gung teaches that to provide a more accurate forecast,
competitor’s performance should be considered.

PRINCIPLES OF LAW
35 U.S.C. § 112, second paragraph
The test for definiteness under 35 U.S.C. § 112, second paragraph, is
whether “those skilled in the art would understand what is claimed when the
claim is read in light of the specification.” Orthokinetics, Inc. v. Safety
Travel Chairs, Inc., 806 F.2d 1565, 1576 (Fed. Cir. 1986) (citations
omitted).

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35 U.S.C. § 102
“A claim is anticipated only if each and every element as set forth in
the claim is found, either expressly or inherently described, in a single prior
art reference.” Verdegaal Bros. v. Union Oil Co. of California, 814 F.2d
628, 631 (Fed. Cir. 1987).

35 U.S.C. § 103
“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., 127 S.Ct. 1727,
1734 (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, 127 S.Ct. at 1734 (“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 1739, and discussed circumstances in which a patent might be
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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, 127 S.Ct. at 1739 (citing Graham, 383 U.S.
at 12 (emphasis added)), 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.
The Court explained:
When a work is available in one field of endeavor,
design incentives and other market forces can
prompt variations of it, either in the same field or a
different one. If a person of ordinary skill can
implement a predictable variation, § 103 likely
bars its patentability. For the same reason, if a
technique has been used to improve one device,
and a person of ordinary skill in the art would
recognize that it would improve similar devices in
the same way, using the technique is obvious
unless its actual application is beyond his or her
skill.
Id. at 1740. The operative question in this “functional approach” is thus
“whether the improvement is more than the predictable use of prior art
elements according to their established functions.” Id.

ANALYSIS
Rejection of claims 21-24 under 35 U.S.C. § 112, second paragraph
The Examiner found “[i]t is unclear how the term ‘performance’ is
being used [in claim 21]” (Ans. 3). The Examiner explained that
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“[performance] would seem to connote use of quality or standards but
nothing has been recited to quantify this term” (Ans. 3).
The Appellant contends that the Examiner has “mistaken breadth for
indefiniteness” and that the Specification “makes clear that ‘performance’
relates to, for example, ‘run rate information,’ including the consumption or
rate of consumption of supplied materials by a supply chain participant” and
that the term is “not limited to any one specific standard or quality” (App.
Br. 4, citing Spec. 5).
The customary meaning of “performance” is the way in which
someone or something functions (Fact 1). The Appellant’s Specification
does not provide a definition of “performance” or use the term in any way
contrary to its ordinary and customary meaning (Fact 2). The Appellant’s
Specification describes that the information used to provide feedback for
determination of the material order includes: a comparison between actual
run rate and anticipated run rate, actual and expected product yield, and the
evaluation and possible adjustment of inventory levels and forecasts
(Fact 3). As such, one having ordinary skill in the art, upon reading the
Appellant’s Specification, would understand the term “performance” in
claim 21 to refer to the way in which a supply chain participant functions,
including, for example, the run rate, product yield, and inventory level of a
manufacturer.1 We conclude that those skilled in the art would understand

1 A manufacturer is part of the supply chain and is thus a “supply chain
participant.” A supply chain starts with unprocessed raw materials and ends
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what is meant by “performance” when the claim is read in light of the
Specification, and we will not sustain the Examiner’s rejection of claims
21-24 under 35 U.S.C. § 112, second paragraph.

Rejection of claims 21-24 under 35 U.S.C. § 102(b) as anticipated by Graves
The Examiner found that Graves discloses code operable to
re-determine a required quantity using feedback relating to a performance of
at least one supply chain participant, as recited in claim 21 (Ans. 4). In
particular, the Examiner found that the customer in Graves qualifies as a
“supply chain participant” and that its “performance” is the functioning of
the facility that results in drawing down of the tank supply (Ans. 4, citing
Graves, col. 17, ll. 28-37).
The Appellant argues that “Graves merely monitors the level of a
storage tank and compares it to projected levels” and that this comparison
“provides no information regarding the performance of a supply chain
participant” (App. Br. 5). We disagree.
Taking into consideration the definition of performance as being
broad enough to include the way in which a supply chain participant
functions, including, for example, the run rate, product yield, and inventory
level of a manufacturer, Graves clearly discloses that the programming unit
106 executes a program that re-determines the required quantity of
with a final customer using the finished goods. All vendors, manufacturers,
service providers, and customers are participants in the supply chain.
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chemicals using feedback from the sensor 100 relating to the inventory level
of chemicals in the storage tank 102 (i.e., the performance of the
manufacturer’s paper mill) of the paper manufacturer (supply chain
participant) (Facts 4-8). Thus, Graves is clearly monitoring the performance
of the paper mill manufacturer to determine the rate at which the chemicals
used in the paper production process are being used so that the manufacturer
can automatically adjust, if necessary, the timing of the delivery of
additional chemicals based on the rate of use.
The Examiner found that Graves discloses that the feedback includes
a comparison between an actual run rate and a corresponding anticipated run
rate, as recited in claim 22 (Ans. 4, citing Graves, col. 17, ll. 28-30). The
Appellant argues that “a tank level is not a run rate” and that there is no
mention in the cited portion of Graves of feedback” (App. Br. 6). We
disagree. The level of chemicals in the tank corresponds to the “rate at
which the chemical in the storage tank is being consumed” which is directly
related to the run rate of the paper mill (Fact 9). Graves’s inventory
management system 10 predicts storage tank product levels based on
forecasted and actual usage rates by comparing projected usage level to
actual usage level, which is provided as feedback from sensor 100
(Facts 10, 11).
The Examiner found that Graves discloses a product forecast, as
recited in claim 24 (Ans. 4, citing Graves, col. 17, ll. 30-31). The Appellant
argues that “Graves is wholly silent as to any computer readable code” and
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“that revaluating projected tank levels is not the same as determining a
quantity using one or more of a product forecast, a bill of materials, a
material lead time, and a desired inventory level” (App. Br. 6). We find it
disingenuous for the Appellant to contend that Graves does not disclose
computer readable code since Graves explicitly states that its processing unit
executes “a specially designed program,” which necessary must be made up
of computer readable code (Fact 7). Further, we fail to see how Graves’s
disclosure of re-determining the projected usage rate of chemicals based on a
comparison of actual versus projected usage rates is any different from
re-determining a required quantity using a desired inventory level, as recited
in claim 24. Thus, we sustain the Examiner’s rejections of claims 21, 22,
and 24 under 35 U.S.C. § 102(b) as anticipated by Graves.

Rejection of claims 21-24 under 35 U.S.C. § 103(a) as unpatentable over
Graves and Gung
The Examiner concluded that the subject matter of claims 21-24
would have been obvious to one having ordinary skill in the art because
Gung discloses forecasting demand based upon performance (Gung, col. 3,
ll. 16-19), and one would have been motivated to use the model-based value
of Gung to set the threshold of the feedback system in Graves to make it
have a more efficient target (Ans. 5).
The Appellant argues that the Examiner’s reasoning is circular and is
merely a statement that the reference can be modified (App. Br. 7). The
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Appellant also argues that modifying the real time evaluation system of
Graves to have the speculative forecast model of Gung would prohibit
Graves from keeping track of consumable materials in real time and thus
would render Graves unfit for its intended purpose (App. Br. 8). The
Appellant also argues that Gung does not teach “forecasting demand based
upon performance” because it discloses “adjusting forecast demand based on
‘external constraints include price change, inventory status, and competitors
[sic] performance’” (App. Br. 9).
Gung teaches that to provide a more accurate forecast, competitor’s
performance should be considered (Facts 12-14). One having ordinary skill
in the art would have recognized that this technique could be applied to the
inventory management system of Graves, to provide a more accurate
forecast of the projected usage rate. In other words, if it were known that a
competing paper mill just won a bid to supply paper to one of the
manufacturer’s customers, the manufacturer could take this into account (as
feedback) and re-determine the projected usage rate of its chemicals based
on a decreased demand for its paper (perhaps they would not operate the mill
at full capacity). By taking into account the competitor’s performance, the
system in Graves would be more efficient because by re-determining the
quantity of chemicals necessary, the plant could notify its suppliers to wait
longer between shipments and thus reduce inventory costs and spread out the
costs for the chemicals over a longer period of time. This modification
would not render Graves’s system unfit for its intended purpose, because the
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competitor’s performance feedback is used to adjust the forecast of the
projected usage, but the system in Graves would still continue to also
monitor the actual usage of the chemical and adjust the projected usage
accordingly. The system would merely use two pieces of feedback, rather
than one, to obtain an improved and more accurate forecast of expected
usage. See KSR, 127 S.Ct. at 1740 (“if a technique has been used to improve
one device, and a person of ordinary skill in the art would recognize that it
would improve similar devices in the same way, using the technique is
obvious unless its actual application is beyond his or her skill.”) The
Appellant has not shown that modifying the system of Graves with the
added feedback, as suggested by Gung, would have been beyond the skill of
one having ordinary skill in the art. As such, we sustain the Examiner’s
rejection of claims 21-24 under 35 U.S.C. § 103(a) as unpatentable over
Graves and Gung.

CONCLUSIONS OF LAW
We conclude the Appellant has shown that the Examiner erred in
rejecting claims 21-24 under 35 U.S.C. § 112, second paragraph. The
Appellant has not shown that the Examiner erred in rejecting claims 21, 22,
and 24 under 35 U.S.C. § 102(b) as anticipated by Graves and claims 21-24
under 35 U.S.C. § 103(a) as unpatentable over Graves and Gung.

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DECISION
The decision of the Examiner to reject claims 21-24 is affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv) (2007).

AFFIRMED

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