Ex Parte Davidson

Board of Patent Appeals and Interferences

Dec 22, 2010

10938326 (B.P.A.I. Dec. 22, 2010)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
10/938,326 09/10/2004 S. Kenneth Davidson 17746-55715-B 3302
7590 12/23/2010
J. Charles Dougherty
Wright, Lindsey & Jennings LLP
Suite 2300
200 West Capitol Avenue
Little Rock, AR 72201
EXAMINER
KOPPIKAR, VIVEK D
ART UNIT PAPER NUMBER
3686
MAIL DATE DELIVERY MODE
12/23/2010 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte S. KENNETH DAVIDSON
____________

Appeal 2009-009764
Application 10/938,326
Technology Center 3600
____________

Before ANTON W. FETTING, JOSEPH A. FISCHETTI, and BIBHU R.
MOHANTY, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL1

1 The two-month time period for filing an appeal or commencing a civil
action, as recited in 37 C.F.R. § 1.304, or for filing a request for rehearing,
as recited in 37 C.F.R. § 41.52, begins to run from the “MAIL DATE”
(paper delivery mode) or the “NOTIFICATION DATE” (electronic delivery
mode) shown on the PTOL-90A cover letter attached to this decision.

Appeal 2009-009764
Application 10/938,326
2
STATEMENT OF THE CASE
The Appellants seek our review under 35 U.S.C. § 134 (2002) of the
final rejection of claims 1, 3-11, and 19-23 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 AFFIRM.

THE INVENTION
The Appellants’ claimed invention is directed to an insurance system
in the fields of property, casualty, and related insurance that provides a
return-of-premium (ROP) benefit through a rider on a policy. (Spec.
[0015]). Claim 19, reproduced below, is representative of the subject matter
of appeal.

19. A method for offering an insurance product with a return-of-
premium benefit utilizing a computer, comprising the steps of:

(a) computing a base premium amount for an insurance product
comprising one of non-commercial homeowners' insurance and
non-commercial automobile insurance, based upon one of an
input value of an insured property or a computerized risk
assessment for an insured casualty risk;

(b) computing a cost for a return-of-premium benefit utilizing a
return-of- premium algorithm, wherein said return-of-premium
computation receives as input the base premium amount, a
return-of-premium term, and at least one non-zero return-of-
premium fraction;

(c) computing a total premium amount by adding the base
premium amount to the cost for a return-of-premium benefit;
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and

(d) outputting an insurance product offering comprising the
total premium amount.

THE REJECTIONS
The Examiner relies upon the following as evidence in support of the
rejections:
Boswell US 2003/0126053 A1 Jul. 3, 2003
Zaccaria US 7,027,992 B2 Apr. 11, 2006
Return of Premium Disability Insurance: The Black Hole" by
Richards. Obtained from:
http://web.archive.org/web/20020106034845/http://www.cbadi.corn/r
op_article.htm on Aug. 5, 2005.
"Shopping the Market for Finite Risk Products". Risk Management, p.
34, by Russ Banham, September 1994, From Dialog File 16 (Gale
Group); Document Number: 03537642.

First Commonwealth available at http
://web.archive.org/web/20021211162822/www,
fcbanking.com/insurance/termlifequot. Obtained Nov. 14, 2005.

The following rejections are before us for review2:
1. Claims 19-27 are rejected under 35 U.S.C. § 112, second
paragraph, as being indefinite for failing to particularly point out and
distinctly claim the subject matter which the applicant regards as the
invention.
2. Claims 1, 3-8, and 11 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Richards, Banham, and Zaccaria.

2 The Appellant has indicated that claims 24-28 have been cancelled at page
8 of the Brief.
Appeal 2009-009764
Application 10/938,326
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3. Claims 9-10 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Richards, Banham, Zaccaria, First Commonwealth, and
Boswell.
4. Claim 19 is rejected under 35 U.S.C. § 103(a) as unpatentable
over Richards and Banham.
5. Claims 20-22 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Richards and Banham.
6. Claim 23 is rejected under 35 U.S.C. § 103(a) as unpatentable
over Richards, Banham, and First Commonwealth.

THE ISSUES
With regards to the rejection of claim 19-27 under 35 U.S.C. § 112,
second paragraph, the issue turns on whether those skilled in the art would
understand what is claimed when claim 19 is read in light of the
Specification.
With regards to the rejection of claims 1, 3-7, 9-11, 19, and 23 under
35 U.S.C. § 103(a) the issue turns on whether it would have been obvious to
one of ordinary skill in the art to modify the cited prior art to be used in non-
commercial homeowners and auto insurance.
With regards to the rejection of claims 8 and 20-23 under 35 U.S.C.
§ 103(a) the issue turns on whether it would have been obvious to one of
ordinary skill in the art to modify the cited prior art to include recalculating
the cost of the return of premium benefit in response to a change in the
premiums paid.

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FINDINGS OF FACT
We find the following enumerated findings of fact (FF) are supported
at least by a preponderance of the evidence:3
FF1. Richards has disclosed that a “Return of Premium rider” is an optional
feature of a disability income policy. The disability contract basically says
that the insurance company agrees to refund 80% of the total premiums paid
into the plan after 10 years minus any claim dollars that are paid to the
insured (ppgh. 3).
FF2. Banham has disclosed that the return premium aspect of finite risk
remains one of its chief attractions. Carriers interviewed have written
policies across the board: environmental exposures, workers compensation,
marine risks, fidelity, umbrella, profession liability, and a wealth of others
(Page 4, ppgh. 6). The IRS noted that in favorable loss scenarios finite risk
insurers return a percentage of the premium (Page 5, ppgh. 3).
FF3. Zaccaria has disclosed a method of reducing risk in an energy industry
(Title). Zaccaria at Col. 20:28-60 discloses time limits for claims, notice of
change requirements, and books and records requirements.

ANALYSIS
Rejection under 35 U.S.C. § 112, second paragraph
The Examiner has determined that the rejection of claims 19-23 is
improper because the independent claim does not set forth and there is no
antecedent basis for the step of “wherein an insured pays the premium, the
point(s) in time at which they are paid and the time period for the insurance

3 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
Appeal 2009-009764
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policy and a the step of making a determination when the insured cancels the
policy at what point in them they have cancelled the policy” (Ans. 3-4).
In contrast, the Appellant has determined that the rejection of record is
improper because the proposed steps are not necessary to claim all the
essential steps in the claim (Br. 11-12).
We agree with the Appellant. 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). Here, a reading of claim 19
does not require the step cited by the Examiner in order to understand what
is being claimed in light of the specification. The Appellant is entitled to
claim the invention broadly and it is clear what is being claimed in claim 19.
For these reasons the rejection of claims 19-23 under 35 U.S.C. § 112,
second paragraph, is not sustained.

Rejection under 35 U.S.C. § 103(a)
The Examiner has argued that the rejection of claim 1 is improper
because Richards is directed to a discussion of disability insurance and is
unworkable in the field of property and casualty insurance (Br. 12). The
Appellants similarly argue that Banham is also inapplicable to homeowners
and automobile insurance and that the reference provides no suggestion on
how to apply a return-of-premium benefit to the property and casualty field
(Br. 12-13). The Appellant also argues that Zaccaria does not teach a return
of any earned premium and instead relates to unearned premiums when the
coverage period was not used (Br. 13)
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In contrast, the Examiner has determined that the rejection of record is
proper (Ans. 11-12).
We agree with the Examiner. Richards has disclosed the use of a
“Return of Premium rider” in a disability income policy (FF1). Banham has
disclosed that finite risk insurers may return of percentage of the premium as
well (FF2). Further, the Appellant has also acknowledged that the return of
premium benefit is known for life and health products (Br. 9). Banham has
also disclosed that carriers interviewed have written policies across the
board: environmental exposures, workers compensation, marine risks,
fidelity, umbrella, profession liability, and a wealth of others (FF2) which
shows that insurers are aware of a wide variety of policies. Zaccaria has
disclosed a method of reducing risk in an energy industry which discloses
time limits for claims, notice of change requirements, and book and record
requirements (FF4).
The modification of the disclosed prior art system of Richard which
used a “Return of Premium rider” on a disability income policy to be applied
to a conventional homeowners or automobile insurance policy in view of the
Banhams disclosure that insurance companies write policies across a wide
variety of insurance products and to further include time limits for claims as
taught by Zaccaria in order to simplify recording issues is considered an
obvious, predictable combination of familiar elements for their known
functions to obtain additional revenue by expanding the rider to existing
product lines. In KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007) the
Court stated that when considering obviousness that “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.” KSR at 418.
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Here, one of ordinary skill in the art would have realized that the return of
premium rider concept could be applied to other types of policies. The
claims do not require that a particular method of calculating the return of
premium benefit be provided where the total amount of premium is not
known in advance. Regardless, one of ordinary skill in the art could employ
conventional accounting techniques to determine what premiums were
actually paid when not paid in advance. The Appellants argue that Zaccaria
does not disclose the return of an earned premium for coverage periods that
were paid (Br. 13) but this feature has been disclosed by Richard. For these
above reasons the rejection of claim 1, as well as claims 3-7, 9-11, and 19
for which the Appellants have provided the same arguments, is sustained.
Claim 8 contains a limitation drawn to recalculating the cost of the
return of premium benefit in response to a change in at least one of the
premiums paid under the contract. The Examiner took Official Notice that
“recalculating the cost of premium in response to change in the insurance
policy” is a feature well known in the industry in the Office Action of May
21, 2007 at page 8. The Appellant’s response on Aug. 13, 2007 did not
expressly traverse that “recalculating the cost of premium in response to
change in the insurance policy” is a feature well known in the industry and
instead argued that “recomputation of the return-of-premium cost” was not
shown in the prior art at page 12. Thus, the Appellant has failed to traverse
the Official Notice that “recalculating the cost of premium in response to
change in the insurance policy” is a feature well known in the industry
despite the Appellants arguments made at page 4 of the Reply Brief. Here,
one of ordinary skill in that art would have seen that the extension of
recalculating the cost of premiums in insurance policy’s to include return-of-
premium policy’s to be an obvious, predictable modification to simply
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determine the benefit to be paid. For this reason the rejection of claim 8, as
well as claims 20-23 which contain a similar limitation, is also sustained.

DECISION
The Examiner’s rejection of claims 1, 3-11, and 19-23 is sustained.

AFFIRMED

mev

J. Charles Dougherty
Wright, Lindsey & Jennings LLP
Suite 2300
200 West Capitol Avenue
Little Rock AR 72201