Ex Parte Grabski

Board of Patent Appeals and Interferences

Jul 25, 2008

10054086 (B.P.A.I. Jul. 25, 2008)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
____________________ 2
3
BEFORE THE BOARD OF PATENT APPEALS 4
AND INTERFERENCES 5
____________________ 6
7
Ex parte JOHN R. GRABSKI, III 8
____________________ 9
10
Appeal 2008-1505 11
Application 10/054,086 12
Technology Center 3600 13
____________________ 14
15
Decided: July 25, 2008 16
____________________ 17
18
Before WILLIAM F. PATE, III, MURRIEL E. CRAWFORD, and JOHN C. 19
KERINS, Administrative Patent Judges. 20
21
PATE, III, Administrative Patent Judge. 22
23
DECISION ON APPEAL 24
25
STATEMENT OF CASE 26
The Appellant appeals under 35 U.S.C. § 134 (2002) from a Final 27
Rejection of claims 1-25. We have jurisdiction under 35 U.S.C. § 6(b) 28
(2002). 29
The Appellant claims a system for determining a transaction cost of 30
an item which accounts for supplier-related costs and any value-added31
Appeal 2008-1505
Application 10/054,086

2
features that are supplied with the item (such as availability of electronic 1
funds transfer or bar coding). 2
Representative independent claim 1 reads as follows: 3
1. A cost processing system for determining a 4
transaction cost of an item, the system comprising: 5
department logic to define one or more 6
departments which produce cost-driving 7
transactions; 8
allocation logic to define an allocation of 9
business expenditures attributable to each 10
department; 11
item logic to obtain a number of items 12
transacted in each department; and 13
cost logic to determine the transaction cost 14
of the item in each of the departments transacting 15
the item based on the allocation of business 16
expenditures to each of the departments and the 17
number of items transacted in each of the 18
departments, 19
wherein the department logic defines a 20
department for transacting the item if the item is 21
supplied with a value-added feature, and 22
whereby determining the transaction cost of 23
the item accounts for supplier-related costs. 24
25
In the Specification, the Appellant defines “logic” as including, but 26
not limited to, “hardware, software and/or combinations of both to perform 27
one or more functions, acts and/or events” (Spec. 3). Independent claim 28
11 is directed to a similar cost processing system and is drafted in a means 29
plus function format. Independent claim 12 recites a method for 30
determining a transaction cost of an item. Independent claim 19 recites a 31
computer readable medium storing a program for determining a transaction 32
cost of an item. 33
Appeal 2008-1505
Application 10/054,086

3
The prior art relied upon by the Examiner in rejecting the claims is: 1
1. Anthony et al., Accounting: Text and Cases 115-118, 531-534 2
and 612-616 (9th ed., 1995). 3
4
2. Avery, Susan, MRO Purchasing Plays Roles in Reshaping the 5
Distribution Channel, 126 Purchasing 108 (May 20,1999). 6
7
3. Ellram, Lisa, Total Cost of Ownership: Elements and 8
Implementation, International Journal of Purchasing and Materials 9
Management 3-11 (Fall 1993). 10
11
The Examiner rejected claims 1-11, 20, 21 and 24 under 35 U.S.C. 12
§ 103(a) as unpatentable over Anthony, Avery and Ellram. 13
The Examiner also rejected claims 12-19, 22-23 and 25 under 14
35 U.S.C. § 103(a) as unpatentable over Anthony and Avery. 15
We AFFIRM. 16
17
ISSUES 18
The following issues have been raised in the present appeal. 19
1. Whether the Appellant has shown that the Examiner erred in 20
rejecting claims 1-11, 20, 21 and 24 as unpatentable over Anthony, Avery 21
and Ellram. 22
2. Whether the Appellant has shown that the Examiner erred in 23
rejecting claims 12-19, 22-23 and 25 as unpatentable over Anthony and 24
Avery. 25
Appeal 2008-1505
Application 10/054,086

4
FINDINGS OF FACT 1
The record supports the following findings of fact (FF) by a 2
preponderance of the evidence. 3
1. Anthony discloses that it is common for organizations to use 4
computer-based accounting systems for accounting (pp. 115-118). Anthony 5
also discloses accounting methods for determining a cost of an item where 6
business expenditures attributable to various cost centers (i.e., departments) 7
are allocated accordingly thereby disclosing an allocation logic (pp. 531, 8
532, 612-615). In order to allocate the business expenditures, the 9
departments which produce cost-driving transactions must be initially 10
identified. Thus, Anthony inherently discloses a department logic that 11
defines the departments. Anthony further discloses the importance of per 12
unit costs which is the total cost divided by volume (number of units) (pp. 13
531, 532). The number of units is required for such analysis, and thus, an 14
item logic is also inherently disclosed. Anthony further discloses the 15
collection of all the costs incurred in the cost centers, and the allocation of 16
these costs to the products accordingly (pp. 615, 616). Thus, Anthony 17
discloses a cost logic for determining the transaction cost of the item in each 18
of the departments transacting the item (pp. 615, 616). 19
2. Anthony does not specifically disclose that the department logic 20
defines a department for transacting the item if the item is supplied with a 21
value-added feature. 22
3. Anthony also does not specifically disclose that determining the 23
transaction cost of the item accounts for supplier-related costs. 24
Appeal 2008-1505
Application 10/054,086

5
4. Avery discloses that in electronic commerce, wholesalers of 1
products must explore value-added features such as electronic funds transfer 2
with their customers (Examiner’s annotated Sec. A). 3
5. Ellram discloses the importance of total cost analysis in 4
purchasing so that all costs associated with a good or service are considered 5
(p. 3). Ellram specifically discloses that total cost analysis includes 6
determining the transaction cost of the item while accounting for supplier-7
related costs including non-price factors such as “transportation costs, 8
receiving costs, quality costs (inspection, rework, reject costs), purchasing 9
administrative expenses,” “costs associated with preparing and placing the 10
order (EDI, Fax, phone, and so on), following up on the order, receiving, 11
matching receiving data to the invoice, and paying the bill” (pp. 4, 5 and 7). 12
Ellram teaches that the total cost analysis can be used to compare suppliers 13
and can aid in making supplier selection decisions because it provides 14
complete cost data (p. 4). 15
16
PRINCIPLES OF LAW 17
“Section 103 forbids issuance of a patent when ‘the differences 18
between the subject matter sought to be patented and the prior art are such 19
that the subject matter as a whole would have been obvious at the time the 20
invention was made to a person having ordinary skill in the art to which said 21
subject matter pertains.’” KSR Int'l Co. v. Teleflex Inc., 127 S.Ct. 1727, 22
1734 (2007). The question of obviousness is resolved on the basis of 23
underlying factual determinations including (1) the scope and content of the 24
prior art, (2) any differences between the claimed subject matter and the 25
Appeal 2008-1505
Application 10/054,086

6
prior art, (3) the level of skill in the art, and (4) where in evidence, so-called 1
secondary considerations. Graham v. John Deere Co., 383 U.S. 1, 17-18 2
(1966). In KSR, the Supreme Court also stated that “[t]he combination of 3
familiar elements according to known methods is likely to be obvious when 4
it does no more than yield predictable results.” KSR, 127 S.Ct. at 1739. The 5
Court also explained that design incentives and other market forces can 6
prompt variations of the prior art and that “[i]f a person of ordinary skill can 7
implement a predictable variation, §103 likely bars its patentability.” KSR, 8
127 S.Ct. at 1740. The Court noted that “[t]o facilitate review, this analysis 9
should be made explicit,” but “the analysis need not seek out precise 10
teachings directed to the specific subject matter of the challenged claim” Id. 11
at 1741, citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006). 12
The Federal Circuit has also held that: 13
an implicit motivation to combine exists not only 14
when a suggestion may be gleaned from the prior 15
art as a whole, but when the “improvement” is 16
technology-independent and the combination of 17
references results in a product or process that is 18
more desirable, for example because it is stronger, 19
cheaper, cleaner, faster, lighter, smaller, more 20
durable, or more efficient. Because the desire to 21
enhance commercial opportunities by improving a 22
product or process is universal - and even 23
common-sensical - we have held that there exists 24
in these situations a motivation to combine prior 25
art references even absent any hint of suggestion in 26
the references themselves. In such situations, the 27
proper question is whether the ordinary artisan 28
possesses knowledge and skills rendering him 29
capable of combining the prior art references. 30
Appeal 2008-1505
Application 10/054,086

7
Dystar Textilfarben GmbH & Co. Deutschland KG v. C.H. Patrick Co., 464 1
F.3d 1356, 1368 (Fed. Cir. 2006). 2
3
ANALYSIS 4
Rejection of claims 1-11, 20, 21 and 24 5
The Examiner rejected these claims as unpatentable over Anthony, 6
Avery and Ellram. Initially, we note that the Appellant argues independent 7
claims 1 and 11 together as a group in the Appeal Brief (App. Br. 12). 8
Hence, we select representative claim 1 to decide the appeal of these 9
independent claims, claim 11 standing or falling with claim 1. See 37 C.F.R. 10
§ 41.37(c)(1)(vii) (2007). 11
The Examiner states that Anthony discloses most of the recited 12
limitations of claim 1 except for a department being defined for an item 13
supplied with a value-added feature, and that determining the transaction 14
cost of the item accounts for supplier-related costs (Ans. 3-5; FF 1-3). The 15
Examiner notes that Avery discloses an item supplied with a value-added 16
feature (e.g., electronic funds transfer capability) (Ans. 4 and 5; FF 4). 17
Furthermore, the Examiner notes that Ellram discloses determining the total 18
cost of the item which accounts for supplier-related cost (Ans. 5; FF 5). 19
Thus, the Examiner concludes that independent claim 1 would have been 20
obvious to one of ordinary skill in view of Anthony, Avery and Ellram. We 21
agree. 22
The Appellant initially argues that the Examiner has not provided any 23
motivation for combining Anthony with Avery and that the Examiner is 24
engaging in impermissible hindsight because Avery merely discusses that 25
Appeal 2008-1505
Application 10/054,086

8
value-added services may play a role in electronic commerce (App. Br. 13 1
and 14). However, we agree with the Examiner that the very definition of a 2
value-added service is that it adds value to a product so that the desirability 3
of providing such a value-added feature is implicit in Avery (Ans. 5 and 24). 4
In addition, we find that one of ordinary skill in the art would have been 5
motivated to implement the cost processing system of Anthony to 6
accommodate items supplied with value-added features so that the cost 7
processing system determines the true costs of the items more accurately and 8
efficiently. See Dystar Textilfarben, 464 F.3d at 1368. 9
The Appellant also argues that Ellram fails to cure the deficiencies of 10
Anthony and Avery in that Ellram fails to disclose or suggest any 11
mechanism for defining a department for transacting an item if the item is 12
supplied with a value-added feature (App. Br. 14). However, as noted by the 13
Examiner, the combination of Anthony and Avery already discloses this 14
limitation (Ans. 5). Ellram is relied upon for teaching that the total cost 15
analysis determines the transaction cost of the item while accounting for 16
supplier-related costs (i.e., identified non-price factors) as specifically 17
recited in claim 1 (Ans. 5; FF 5). Moreover, Ellram teaches the desirability 18
of determining total cost for the purpose of selecting suppliers, thereby 19
providing one of ordinary skill in the art with the motivation for applying the 20
teachings of Ellram to the combination of Anthony and Avery (Ans. 5; FF 21
5). 22
The Appellant further argues that the suggested combination of 23
Anthony, Avery and Ellram still fails to disclose various recited limitations. 24
However, the Appellant’s argument is without merit because the suggested 25
Appeal 2008-1505
Application 10/054,086

9
combination does disclose all of the recited limitations of claim 1 (FF 1-5). 1
Thus, we find that the Appellant has failed to show that the Examiner erred 2
in rejecting independent claims 1 and 11 as unpatentable over Anthony, 3
Avery and Ellram. 4
With respect to dependent claim 8, the Appellant contends that the 5
portion of Anthony cited by the Examiner stating that the average cost per 6
unit is the total cost divided by the volume fails to disclose the recited logic 7
to sum the business expenditures allocated to each department or the recited 8
logic to divide the sum by the number of items (App. Br. 15 and 16). 9
However, the Appellant’s argument is again without merit. The cost (i.e., 10
the business expenditures) and the number of items are required to calculate 11
the average cost per unit described in Anthony (FF 1). Moreover, Anthony 12
also specifically teaches the collection of all the costs incurred in the cost 13
centers and allocation of these costs to the products (FF 1). Thus, we agree 14
with the Examiner that this limitation is disclosed by Anthony and conclude 15
that the Appellant has not shown that Examiner erred in rejecting dependent 16
claim 8. 17
With respect to dependent claim 20, the Appellant contends that the 18
suggested combination of Anthony, Avery and Ellram fails to disclose the 19
logic that defines a first department (for transacting the item if the item is 20
supplied with the value-added feature) and a second department (for 21
transacting the item if the item is supplied without the value-added feature) 22
(App. Br. 16). We disagree. Anthony inherently discloses defining a 23
department for transacting the item (FF 1). An item is either supplied with a 24
value-added feature, or supplied without a value-added feature. As 25
Appeal 2008-1505
Application 10/054,086

10
discussed supra relative to claim 1, Avery was merely relied upon for 1
disclosing an item supplied with a value-added feature (FF 1). Hence, claim 2
20 is inherently disclosed by the combination of Anthony and Ellram 3
(without Avery) and is unpatentable. The fact that the combination of 4
Anthony and Ellram does not explicitly state that the item is provided 5
without a value-added feature is immaterial because, as noted, an item is 6
necessarily supplied with a value-added feature, or supplied without a value-7
added feature. Thus, we find that the Appellant has not shown that the 8
Examiner erred in rejecting dependent claim 20. 9
The Appellant further asserts that claims 2-10, 21 and 24 are 10
patentable at least by the virtue of their dependency, as well as the additional 11
features recited therein (App. Br. 15). However, with the exception of 12
dependent claims 8 and 20 discussed supra, the Appellant does not present 13
any separate arguments with respect to the limitations recited in these 14
dependent claims. A statement which merely points out what a claim recites 15
is not considered an argument for separate patentability of the claim. 16
37 C.F.R. 41.37(c)(1)(vii) (2007). A general allegation that the art does not 17
teach any of the claim limitations is no more than merely pointing out the 18
claim limitations. Thus, we also find that Appellant has failed to show that 19
the Examiner erred in rejecting claims 2-10, 21 and 24. 20
21
Rejection of claims 12-19, 22-23 and 25 22
The Appellant merely refers to the arguments presented with respect 23
to independent claims 1 and 11 in arguing the patentability of independent 24
claims 12 and 19 (App. Br. 17). Thus, for same the reasons discussed supra 25
Appeal 2008-1505
Application 10/054,086

11
relative to claims 1 and 11, we find that the Appellant has failed to show that 1
the Examiner erred in rejecting independent claims 12 and 19. 2
The Appellant also argues that claims 13-18, 22, 23 and 25 are 3
patentable at least by the virtue of their dependency, as well as the additional 4
features recited therein (App. Br. 17). However, the Appellant does not 5
provide any separate arguments with respect to the limitations recited in 6
these dependent claims. Thus, we find that the Appellant has failed to show 7
that the Examiner erred in rejecting these dependent claims as well. 8
37 C.F.R. 41.37(c)(1)(vii) (2007). 9
10
CONCLUSIONS 11
1. The Appellant has not shown that the Examiner erred in 12
rejecting claims 1-11, 20, 21 and 24 as unpatentable over Anthony, Avery 13
and Ellram. 14
2. The Appellant has not shown that the Examiner erred in 15
rejecting claims 12-19, 22-23 and 25 as unpatentable over Anthony and 16
Avery. 17
18
ORDER 19
The Examiner’s rejections of claims 1-25 are AFFIRMED. 20
No time period for taking any subsequent action in connection with 21
this appeal may be extended under 37 C.F.R. § 1.136(a) (2007). See 22
37 C.F.R. § 1.136(a)(1)(iv) (2007). 23
24
AFFIRMED 25
Appeal 2008-1505
Application 10/054,086

12
hh 1
2
3
CALFEE HALTER & GRISWOLD, LLP 4
800 SUPERIOR AVENUE 5
SUITE 1400 6
CLEVELAND, OH 44114 7
8
9