Ex Parte Chasko

Board of Patent Appeals and Interferences

Aug 19, 2004

09438396 (B.P.A.I. Aug. 19, 2004)

1
The opinion in support of the decision being entered today was
not written for publication and is not binding precedent of the
Board.
Paper No. 19
UNITED STATES PATENT AND TRADEMARK OFFICE
__________
BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
__________
Ex parte STEPHEN J. CHASKO
__________
Appeal No. 2004-1484
Application 09/438,396
___________
ON BRIEF
___________
Before FRANKFORT, NASE, and MACDONALD, Administrative Patent
Judges.
FRANKFORT, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal from the examiner's final
rejection of claims 1 through 20, all of the claims pending in
this application.
As noted on page 1 of the specification, appellant’s
invention relates generally to a method and apparatus for
tracking customer purchasing habits, and more particularly, to
Appeal No. 2004-1484
Application 09/438,396
1 While the examiner, on page 3 of the answer, has listed
U.S. Patent No. 6,049,778 to Walker at al. as being prior art
relied upon in the rejections on appeal, we note that it is clear
from the record of the application, particularly the final
rejection (Paper No. 6, page 2), appellant’s brief (Paper No. 14,
page 9) and the statement of rejection set forth on page 3 of the
2
such a method and apparatus wherein a portable device with a
memory, such as a smart card, tracks customer purchasing habits
related to plural profit margin categories. Another aspect of
the invention relates to a method and apparatus wherein a
portable device with a memory storing customer identification and
customer purchasing habits interfaces with a point of sale (POS)
terminal that stores customer information for only one customer
at a time and transmits the customer information only to the
portable device and modifies the stored information on the
portable device based on purchases by the one customer.
Independent claims 1, 7, 13, 14, 19 and 20 are representative of
the subject matter on appeal and a copy of those claims can be
found in the Appendix to appellant’s brief.
The prior art references of record relied upon by the
examiner in rejecting the appealed claims are:
Dorf 6,189,787 Feb. 20, 2001
Fernandez 6,266,647 Jul. 24, 2001
Walker et al. (Walker ‘573)1 6,327,573 Dec. 4, 2001
Appeal No. 2004-1484
Application 09/438,396
answer, that it is instead U.S. Patent No. 6,327,573 to Walker et
al. which is being relied upon by the examiner in the rejection
of claims 1 through 18 on appeal.
3
Claims 1 through 18 stand rejected under 35 U.S.C. § 103(a)
as being unpatentable over Fernandez in view of Dorf and Walker
‘573.
Claims 19 and 20 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over Fernandez in view of Dorf.
Rather than reiterate the conflicting viewpoints advanced by
appellant and the examiner regarding the above-noted rejections,
we refer to the examiner's answer (Paper No. 16, mailed November
18, 2003) and to appellant’s brief (Paper No. 14, filed April 25,
2003) for a full exposition thereof.
OPINION
In reaching our decision in this appeal, we have given
careful consideration to appellant’s specification and claims, to
the applied prior art references, and to the respective positions
Appeal No. 2004-1484
Application 09/438,396
4
articulated by appellant and the examiner. As a consequence of
our review, we have made the determinations which follow.
In rejecting claims 1 through 18 under 35 U.S.C. § 103(a)
based on the collective teachings of Fernandez, Dorf and Walker
‘573, the examiner has determined that Fernandez teaches a
customer loyalty program that uses smart cards to store
accumulated loyalty points earned for different purchases, and
comprises merchant POS stations (e.g., 103A-103D of Fig. 1)
having read/write units (104A-104D) with processors to read
stored balances from an EEPROM on a smart card, receive POS
purchase data, calculate an appropriate amount of purchase award
points to be credited, add those award points to the previous
balance read from the smart card, and write the updated point
balance to the card (col. 4, lines 2-13). What the examiner
finds lacking in Fernandez is 1) any disclosure or teaching
concerning managing and influencing customer purchasing habits
based on profit margin categories, and 2) an express indication
that the smart card mentioned therein includes both a memory and
a processor. To account for these differences, the examiner
looks to Dorf and Walker ‘573, urging that Walker ‘573 teaches
another card-based loyalty system where a smart card having a
Appeal No. 2004-1484
Application 09/438,396
5
memory and a processor is used to store point balances and allows
the stored point balances to be incremented responsive to a POS
transaction (col. 1, lines 22-31). Based on the combined
teachings of Fernandez and Walker ‘573, the examiner concludes
that it would have been obvious to one of ordinary skill in the
art at the time appellant’s invention was made to use a smart
card like that of Walker ‘573 in the system of Fernandez so that
the smart card can interact with the POS system of Fernandez to
increment/decrement card balances.
As for Dorf, the examiner contends that this patent teaches
a card-based loyalty system where points are accumulated for
various qualifying purchases and suggests awarding points for
both product/manufacturer-specific purchases and/or retailer-
specific purchases and also the purchase of a single product type
(col. 9, line 34, et. seq.). Again recognizing that Fernandez
does not teach or suggest managing and influencing customer
purchasing habits based on profit margin categories, the examiner
then makes the following assertions:
[h}owever, these differences are only found in the
nonfunctional descriptive material and are not functionally
involved in the method (or structurally programmed) steps
recited. The steps would be preformed the same regardless
of data content - read balances, associate purchased
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Application 09/438,396
6
products with a balance, increment balances and write new
balances to the cards. Thus, this descriptive material will
not distinguish the claimed invention form the prior art in
terms of Patentability, see In re Gulack, 703 F.2d 1381, 217
USPQ 401, 404 (Fed. Cir. 1983); In re Lowry 32 F.3d 1579, 32
USPQ2d 1031 (Fed. Cir. 1994). Therefore, it would have been
obvious to one of ordinary skill at the time of the
invention to have relied upon any type of data content,
including profit margin ranges. Such data content does not
functionally relate to the steps and the subjective
interpretation of the data content does not patentably
distinguish the claimed invention. Further, Dorf teaches
awarding points for single product types [col 9, line 43].
It would have been obvious to one of ordinary skill at the
time of the invention to have awarded product-specific
points in the program of Fernandez as taught by Dorf.
Associating and awarding points according to single products
can be taken to be inherently awarding products to profit
margin ranges, as each product inherently has its own profit
margin or profit margin range, as defined by cost minus
purchase price for example. (examiner answer, page 4)
After a careful evaluation of the teachings and suggestions
to be derived by one of ordinary skill in the art from a
collective evaluation of Fernandez, Dorf and Walker ‘573 as of
the time appellant’s invention was made, it is our opinion that
the evidence adduced by the examiner is not sufficient to
establish a prima facie case of obviousness with regard to the
subject matter of claims 1 through 12 on appeal, but is
sufficient with regard to the portable device defined in
appellant’s claim 13 and the distributed system defined in claims
14 through 18 on appeal.
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Application 09/438,396
7
Looking first to appellant’s independent claim 1, we note
that this claim is directed to a method of managing customer
purchasing habits related to profit margin categories by using a
first processor with memory (e.g., at a POS terminal) for
receiving and transmitting data, said first processor being
coupled to a portable device (e.g., a smart card) with a) memory
for storing and transferring category values containing
accumulated purchase values in each of different profit margin
ranges and b) a second processor for executing instructions, the
portable device being small enough to be carried by a person, and
said first processor being able to transfer data with said
portable device, said method comprising the steps of:
determining an accumulated purchase value in each of
different profit margin ranges based on a customer purchase
of at least one product having a profit margin; supplying
said portable device to said first processor; transferring
to said first processor category values containing
accumulated purchase values in each of different profit
margin ranges stored in said memory of said portable device;
said first processor incrementing said category values by an
amount in relation to the determined accumulated purchase
value; and transferring said incremented category values
from said memory of said first processor to the memory of
said portable device.
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Application 09/438,396
8
Contrary to the examiner’s position, we do not view the
recitations in method claim 1 on appeal regarding profit margins
and the transfer, manipulation and storage of data in each of
different profit margin ranges or categories as being mere
“nonfunctional descriptive material” that is not functionally
involved in the method steps recited. Like appellant (brief,
pages 11-14), it is our view that the recited profit margin
ranges are functionally interrelated with the operation of a
programmed computer executing the method steps as set forth in
claim 1. As was noted on page 4 of the specification, the first
processor memory (e.g., of a POS terminal) stores profit margin
information, current sale information and sequences of
instructions which, when executed by the first processor, cause
the first processor to manage a customer’s purchase information,
i.e., by determining an accumulated purchase value in each of
different profit margin ranges based on a customer purchase of at
least one product having a profit margin, transferring to the
first processor category values containing accumulated purchase
values in each of different profit margin ranges stored in the
memory of a portable device (e.g., a smart card) supplied to the
first processor, said first processor then incrementing the
transferred category values by an amount in relation to the
Appeal No. 2004-1484
Application 09/438,396
9
determined accumulated purchase value(s), and subsequently
transferring said incremented category values from the memory of
the first processor to the memory of the portable device. Thus,
the descriptive material in the present case has a functional
interrelationship with the way in which the computing process is
performed and is not a mere arrangement or compilation of data
that is merely stored so as to be read or outputted by a computer
without creating any functional interrelationship.
In addition, we are unable to agree with the examiner’s
further conclusion in the answer (page 4) that associating and
awarding points according to purchase of a single product type,
as mentioned in Dorf (col. 9, line 43), “can be taken to be
inherently awarding products to profit margin ranges, as each
product inherently has its own profit margin or profit margin
range” (answer, page 4). The applied prior art references
provide no basis for reaching any such conclusion, and the
examiner’s position disregards the well known practice in the
retail sector of having “loss leader” items or products which a
retailer often sells below cost so as to attract customer’s into
the store.
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10
In light of the foregoing, we will not sustain the
examiner’s rejection of claim 1, or claims 2 through 6 which
depend therefrom, under 35 U.S.C. § 103(a).
Independent claim 7 is directed to a computer system for
managing customer purchase information including, inter alia, a
memory coupled to a first processor, with said memory having
stored therein
profit margin information of a customer purchase of at least
one product having a profit margin, current sale
information, and sequences of instructions which, when
executed by said first processor, cause said first processor
to manage customer purchase information by causing said
first processor to command said second processor to execute
instructions to cause the memory of the portable device to
increment a stored category value by an amount in relation
to the customer purchase information and a profit margin
information of the customer purchase.
As with claim 1, it is our opinion that the descriptive
material relating to profit margin information as set forth in
independent claim 7 is functionally interrelated with the
operation of a specially programmed computer programmed to manage
customer purchase information based on profit margin information
of a customer purchase of at least one product having a profit
margin and current sale information, and to cause a first
processor of the computer system to command a second processor of
Appeal No. 2004-1484
Application 09/438,396
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a portable device (e.g., a smart card) associated with the first
processor to further execute instructions to cause the memory of
the portable device to increment a stored category value by an
amount in relation to the customer purchase information and a
profit margin information of the customer purchase. Moreover, we
again find that the examiner is incorrect in his position that
awarding points for purchase of specific product types or a
single product as in Dorf “can be inherently taken to be awarding
products to profit margin ranges” (answer, page 4). For those
reasons, we will not sustain the examiner’s rejection of claim 7,
or claims 8 through 12 which depend therefrom, under 35 U.S.C.
§ 103(a).
We reach a different conclusion with regard to the
examiner’s rejection of claims 13 through 18 under 35 U.S.C.
§ 103(a). In this instance, it is our opinion that the examiner
has correctly concluded that the portable device of claim 13 and
the distributed system of claims 14 through 18 (comprising one or
more portable devices similar to those recited in claim 13) would
have been obvious to one of ordinary skill in the art at the time
of appellant’s invention based on the collective teachings of
Fernandez, Dorf and Walker ‘573, particularly Fernandez and
Appeal No. 2004-1484
Application 09/438,396
12
Walker ‘573. Like the examiner, noting that the smart card of
Fernandez is not expressly said to include a processor, we find
that it would have been obvious to one of ordinary skill in the
art at the time appellant’s invention was made to use a smart
card like that of Walker ‘573, i.e., having both a memory and a
processor to control access to the memory, in the system of
Fernandez so that the smart card can properly interact with the
POS system of Fernandez and increase or decrease values on the
card in response to the POS transaction.
We also agree with the examiner’s assessment of the weight
to be accorded the data stored on the portable device (e.g.,
smart card) set forth in claims 13 and 14 through 18 on appeal.
In this instance, the data representing category values in
different profit margin ranges and customer identifying
information stored in the memory of the portable device is a mere
arrangement or compilation of data that is merely stored so as to
be read or outputted by a computer without creating any
functional interrelationship. Thus, the data stored in the
memory of the portable device as specifically defined in both
independent claims 13 and 14 is merely nonfunctional descriptive
material and is therefore not entitled to patentable weight.
Appeal No. 2004-1484
Application 09/438,396
13
Appellant has not specifically challenged the examiner’s
position with regard to claims 13 and 14 through 18 on appeal,
and has not specifically pointed out where or how these
particular claims define a structural and functional
interrelationship between the category values and other claimed
aspects of the invention permitting the category values’
functionality to be realized.
For the above reasons, we will sustained the examiner’s
rejection of claims 13 through 18 under 35 U.S.C. § 103(a).
As for the examiner’s rejection of claims 19 and 20 on
appeal under 35 U.S.C. § 103(a) based on the combined teachings
of Fernandez and Dorf, we agree with appellant that the examiner
has failed to set forth a prima facie case of obviousness with
regard to the retail checkout stand defined in these claims.
With particular regard to claim 19, we note that the examiner’s
various positions concerning use of profit margin, its purported
status as “nonfunctional descriptive material,” and how such
profit margin information can purportedly be inherently found in
Dorf, are misplaced and unnecessary, since claim 19 does not
mention profit margin, or profit margin ranges or categories. As
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Application 09/438,396
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for the recitations in claim 20 regarding the specially
programmed processor using profit margin information, our views
on the examiner’s position are the same as they were above in
regard to independent claims 1 and 7 on appeal.
We additionally note that the examiner has not addressed how
the system of Fernandez, even if modified by Dorf, would provide
response for the specially programmed processor of claims 19 and
20 and would perform steps © through (e) noted therein regarding
the recited “combined signal” and derived reward signal resulting
from a comparison of the combined signal with a predetermined
value. Moreover, we agree with appellant that Fernandez
indicates that the read/write units generally seen in the value
storage system of Figure 1 of that patent each maintain a log of
information relating to transactions from each card (col. 2,
lines 38-44), and thus belies the examiner’s conclusion that the
last clause of claim 19 requiring the processor memory to never
store a combined signal for more than one item is somehow to be
inherently found in Fernandez. As for the examiner’s further
conclusion that it would have been obvious to merely temporarily
store the points/purchase data for one customer using the system
of Fernandez and not maintain such data from customer to
Appeal No. 2004-1484
Application 09/438,396
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customer, we find this position to be contrary to the teachings
of Fernandez and to be based entirely on unsupported speculation
and conjecture on the examiner’s part. Therefore, we will not
sustain the examiner’s rejection of claims 19 and 20 under
35 U.S.C. § 103(a).
Since we have sustained the examiner’s rejection of claims
13 through 18 under 35 U.S.C. § 103(a), but not the rejections of
claims 1 through 12, 19 and 20 under 35 U.S.C. § 103(a), it
follows that the decision of the examiner is affirmed-in-part.
Appeal No. 2004-1484
Application 09/438,396
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No time period for taking any subsequent action in
connection with this appeal may be extended under 37 CFR
§ 1.136(a).
AFFIRMED-IN-PART
CHARLES E. FRANKFORT )
Administrative Patent Judge )
)
)
) BOARD OF PATENT
JEFFREY V. NASE )
Administrative Patent Judge ) APPEALS AND
)
) INTERFERENCES
)
ALLEN R. MACDONALD )
Administrative Patent Judge )
CEF:pgc
Appeal No. 2004-1484
Application 09/438,396
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Paul W. Martin
Law Department, WHQ-4
1700 S. Patterson Blvd.
Dayton, OH 45479-0001