Ex Parte Gross

Patent Trial and Appeal Board

Aug 27, 2013

10770742 (P.T.A.B. Aug. 27, 2013)

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.
10/770,742 02/02/2004 John N. Gross JNG 2004-6 1018
52447 7590 08/28/2013
PATENTBEST
1195 Park Avenue
Suite 202A
EMERYVILLE, CA 94608
EXAMINER
RUHL, DENNIS WILLIAM
ART UNIT PAPER NUMBER
3689
MAIL DATE DELIVERY MODE
08/28/2013 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 PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JOHN N. GROSS
____________

Appeal 2013-006527
Application 10/770,742
Technology Center 3600
____________

Before HUBERT C. LORIN, ANTON W. FETTING, and
BIBHU R. MOHANTY, Administrative Patent Judges.

LORIN, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
John N. Gross (Appellant) seeks our review under 35 U.S.C. § 134 of
the final rejection of claims 56-65 and 78-85. We have jurisdiction under 35
U.S.C. § 6(b) (2002).

SUMMARY OF DECISION
We REVERSE.
1

1
Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed Jan. 29, 2013) and Reply Brief (“Reply Br.,” filed Apr. 12, 2013),
and the Examiner’s Answer (“Ans.,” mailed Feb. 12, 2013).
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THE INVENTION
Claim 56, reproduced below, is illustrative of the subject matter on
appeal.
56. A system for renting playable media items and exchanging rental
rights to the playable media items distributed by a network based
media service provider, comprising:
at least one computing system connected to a computing
network, the computing system being configured to:
establish a personal queue for each of a plurality of
subscribers, each personal queue containing a subscriber-
chosen and subscriber-prioritized list of media titles that is
delivered to and returned by one of the plurality of subscribers
in accordance with predetermined rental rules,
cause at least some of the plurality of subscribers to
designate certain of the media titles in the personal queues as
being available to others of the plurality of subscribers subject
to a reserve bid,
receive a request over the network for a first media title
from a first subscriber of the plurality of subscribers,
determine whether the first media title can be provided to
the first subscriber from a first inventory of media titles without
requiring a bid,
if the first media title can be provided to the first
subscriber from the first inventory of media titles, provide the
first subscriber with a copy of the first media title from the first
inventory,
if the first media title cannot be provided to the first
subscriber from the first inventory of media titles, search
inventory for the personal queues to determine whether or not
the first media title is among the designated media titles that are
available to the others of the plurality of subscribers subject to
the reserve bid, and
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if the first media title is located among the designated
media titles in one of the personal queues, offer the first
subscriber temporary access to the first media title in
exchange for payment of the reserve bid and in
accordance with the predetermined rental rules.

THE REJECTIONS
The Examiner relies upon the following as evidence of
unpatentability:
de Rafael
Sherr
Hastings

US 5,926,793
US 2002/0154157 A1
US 6,584,450 B1
Jul. 20, 1999
Oct. 24, 2002
Jun. 24, 2003
“Access Self Study Texas State Library Division f/t Blind &
Physically Handicapped Volume 7 Functional Requirements,”
“Approved Dec. 15, 1987”, NFX0001742-NFX0001754. [Texas State
Library]

The following rejections are before us for review:
1. Claims 56-60, 63-65, and 78-85 are rejected under 35 U.S.C. §103(a)
as being unpatentable over Hastings, Sherr, and de Rafael.
2. Claims 61 and 62 are rejected under 35 U.S.C. §103(a) as being
unpatentable over Hastings, Sherr, de Rafael, and Texas State Library.

ISSUE
Have prima facie cases of obviousness been made out for the claimed
subject matter over the cited prior art combinations?

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FINDINGS OF FACT
We find that the following enumerated findings of fact (FF) 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 Specification states:
The Internet is now being used for a number of commercial purposes,
including purchase and rental of movie films in different media
formats. One such popular website is maintained by Netflix®, where
subscribers can search, review and select movie titles (in DVD media
format). If a particular title is available, the subscriber’s choice is
then placed into a rental selection “queue.” During an interactive
online session, a subscriber can select a number of titles, and then
prioritize them in a desired order for shipment within the selection
queue.
Specification 1:21-27.
2. Hastings describes that conventional rental models require a customer to
go to a video rental store to rent movies and that new release movies are
generally due back the next day. (Col. 1, ll. 12-19.)
3. In the Hastings method, “[i]n general, the decision of what items to rent
is separated from the decision of when to rent the items.” (Col. 4, ll. 7-
8.)
4. The decision of what items to rent is a matter of “item selection criteria.”
A customer provides one or more item selection criteria to the provider
indicative of the particular items the customer desires to rent from the
provider.
Item selection criteria may specify any type of item attributes and the
invention is not limited to particular item attributes. Examples of item
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attributes include, without limitation, identifier attributes, type
attributes and cost attributes. Item selection criteria may be changed
at any time to reflect changes in items that customers desire to rent
from a provider.”
Col. 4, ll. 60-64. The items selected are placed into a customer’s order
queue by the provider.
5. According to Hastings:
As used [in Hastings], the term ’items’ refers to any commercial
goods that can be rented to customers. Examples of items include
movies, music and games stored on a non-volatile memory such as a
tape, other magnetic medium, optical medium, read-only memory or
the like, and the invention is not limited to any particular type of item.
(Col. 4, ll. 1-7.)
6. Via the Hastings method, customers enter into a rental agreement with
the provider to rent items from the provider. (Col. 8, ll. 23-24). Once
customers and the provider have entered into a rental agreement and
customers have made item selection criteria, then items are rented to
customers over delivery channels “in accordance with the terms of the
rental agreement.” (Col. 8, l. 66 – col. 9, l. 3).
7. The Internet can be the delivery channel. (Col. 3, ll. 37-39.)
8. In one embodiment, customers enter into a rental agreement with the
provider to rent items from provider according to “MAX OUT” and/or
“MAX TURNS” approaches.
9. The “MAX OUT” approach allows a customer to simultaneously rent out
a specified number of items. (Col. 4, ll. 35-37.)
10. The MAX OUT limit can be increased to allow additional items to be
immediately mailed to the customer. (Col. 11, ll. 5-9.)
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11. The “MAX TURNS” approach allows a customer to exchange up to a
specified number of items during a specified time period. (Col. 4, ll. 37-
40.)
12. The MAX TURNS limit can be overridden to allow more exchanges
during the current cycle. (Col. 10, ll. 55-57.)
13. The “MAX TURNS” approach and the “MAX OUT” approach can be
used together. (Col. 4, ll. 40-42.)
14. This combination of approaches is illustrated in Figure 6 of Hastings,
reproduced below.

Figure 6 illustrates a method of illustrating using both the
“MAX OUT” and “MAX TURNS” approach.
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15. In accordance with the process illustrated in Fig. 6, the customer first
sets selection criteria specifying the items a provider provides to a
customer’s order queue. (Col. 4, ll. 64-66.)
16. The customer then rents out the items from the order queue to a MAX
OUT limit.
17. As the customer returns movies, additional movies from the order queue
are sent to the customer up to the MAX OUT limit. (Col. 10, ll. 30-33.)
18. The customer may exchange up to a specified number of item during a
specified time period up to a MAX TURNS limit.
19. For example, if the rental agreement sets the MAX TURNS and MAX
OUT limits to four, “a determination is made whether four or more
movies have been mailed in the current month. If not, then ... additional
movies [ ] are mailed to customer ... to the “Max Out” limit of four.”
Col. 10, ll. 47-51.
20. There is no evidence on record of secondary considerations of
nonobviousness for our consideration.
21. Additional findings of fact may appear in the Analysis below.

ANALYSIS
The rejection of claims 56-60, 63-65, and 78-85 under 35 U.S.C. §103(a) as
being unpatentable over Hastings, Sherr, and de Rafael.
There are two independent claims: system claim 56 and method claim
78.
Claim 56
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The Examiner takes the position that Hastings discloses all the claim
limitations but for the following:
For claim 56, not disclosed by Hastings is that each of the
subscribers is caused to designate certain media titles as being
available to others subject to a reserve bid. Also not disclosed is the
checking of a first inventory of titles for a requested title and if it is
not able to be provided to the subscriber, then searching subscriber
queues for the requested title and making the title available for the
reserve bid if located.
For claim 78, not disclosed by Hastings is the conducting of an
electronic auction (with a reserve bid, claim 82) among a plurality of
subscribers for ones of media titles designated as available for auction
when the media title cannot be provided from the general inventory of
items, with the media title being transferred to the winning subscriber
of the auction.
Ans. 3. The Examiner relies on Sherr to show that this subject matter is
disclosed in the prior art. However, “[n]ot disclosed in Sherr is that the
swapping is being performed by the subscribers setting forth a bid that they
want to receive in return for giving up the media item in their
possession.” Ans. 5. In that regard, the Examiner cites de Rafael for
the fact that it is very well known in the art of timeshares to allow
people to exchange or trade their timeshare with others. This is a
system that allows users that have temporary access to an asset, to
make that asset available to others for some form of consideration in
the form of a fee or an exchange (swap of one for another).
Ans. 5-6. The Examiner concludes that the claimed subject matter would
have been obvious over the combination of Hastings, Sherr, and de Rafael to
one of ordinary skill in the art at the time of the invention. Ans. 6-8.
The Appellant disagrees. According to the Appellant, the Examiner is
relying on Hastings “for its disclosure of a queue-based media rental
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system” and Sherr and de Rafael “for the task of causing subscribers to
designate certain media titles as being available to others subject to a reserve
bid.” App. Br. 7. The Appellant disputes the relevance of Sherr in part on the
ground that the passages the Examiner relied upon do not in fact show
swapping. App. Br. 8. The Appellant disputes the relevance of de Rafael in
part on the ground that it is non-analogous art and its citation in rejecting the
claim a matter of hindsight reconstruction. App. Br. 11.
Claim 56 is directed to a system “for renting playable media items and
exchanging rental rights to the playable media items” that comprises one
element: “at least one computing system connected to a computing
network.” Per the claim, the computing system is configured to perform four
functions:
1. establish personal queues for subscribers, each containing a
subscriber-chosen and subscriber-prioritized list of media titles that is
delivered to and returned by one of the plurality of subscribers in
accordance with predetermined rental rules;
2. cause some of the subscribers to designate certain media titles in the
personal queues as being available to other subscribers subject to a
reserve bid;
3. receive a request for a media title from a subscriber; and,
4. make a determination as to whether the requested media title can be
provided to the subscriber from an inventory of media titles without
requiring a bid,
a. if so, then provide the first subscriber with a copy of the first
media title from the first inventory,
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b. if not, then search the personal queues to determine whether or
not the media title is among the designated media titles that are
available to the others subject to the reserve bid, and if located
offer the subscriber temporary access to the first media title in
exchange for payment of the reserve bid and in accordance with
the predetermined rental rules.
The Hastings system performs the first function but not the last three.
We agree with the Examiner that de Rafael discloses a computer-
enabled system that performs much of the last three functions - but not all
that is claimed. (We have reviewed Sherr but agree with the Appellant that,
unlike the claimed system, Sherr is directed to swapping items after they are
rented out. See [0054].)
De Rafael describes a digital process for automating timeshare trades;
that is, trading a designated time to use a timeshare property for, for
example, a designated time to use another timeshare property. The process
includes the step of searching for a timeshare available for trade in the
timeshare database. Col. 3, ll. 17-18. Implicit in practicing this step is that
owners of timeshares have previously designated a timeshare available for
trade. That a request for a timeshare from a user has been received is also
implicit. If an available timeshare is located, the user can accept the trade
upon making a deposit. Col. 3, ll. 15-27. The difficulty with de Rafael is that
the process does not make a first determination as to whether the requested
timeshare can be provided to the user from an inventory of timeshares
without requiring a deposit. De Rafael is directed only to situations where
timeshares are provided for trade for a fee.
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The Examiner concludes that “[c]hecking the regular inventory
before checking subscriber queues would have been obvious to one of
ordinary skill in the art.” Ans. 7. However, there is no evidence to support
this conclusion. The Examiner argues that “[o]ne of ordinary skill in the art
is going to recognize that the requested media title can either be found in
regular inventory that is available right now, or it would have to come
from another subscriber who currently has access rights to the requested
title, and who is also willing to make it available to others for a bid.” Ans. 7.
But that is not necessarily true. The combination of Hastings and de Rafael
arguably would lead one of ordinary skill in the art to consider obtaining a
desired title from regular inventory (Hastings) and/or from an inventory of
titles users have made available for rent at a fee (de Rafael). But the
combination does not lead one to make a first determination as to whether
the requested item can be provided to the user from an inventory of
timeshares without requiring a deposit and doing so if it is available, and if
not, then checking items in queues designated as available. There is
insufficient evidence on the record showing that it was known in the art at
the time of the invention to make that determination. Without that evidence,
a prima facie case of obviousness for the claimed subject matter has not been
made out in the first instance.

Claim 78
The Examiner takes the same basis position regarding claim 78. Ans.
3. The Examiner adds that auctions are well known. Ans. 8.
Claim 78 is directed to a method whereby electronic auctions are
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conducted “among a plurality of the subscribers for ones of the media titles
designated as being available for auction when the titles designated as being
available for auction cannot be provided using the general inventory of
media items.”
Here, too, the prior art combination arguably would lead one of
ordinary skill in the art to consider obtaining a desired title from general
inventory (Hastings) and/or via auction (well known). But the combination
does not lead one to make a first determination as to whether the requested
item can be provided to the user from the general inventory and doing so if it
is available, and if not, then obtaining the title via auction. There is
insufficient evidence on the record showing that it was known in the art at
the time of the invention to make that determination. Without that evidence,
a prima facie case of obviousness for the claimed subject matter has not been
made out in the first instance.

The rejection of claims 61 and 62 under 35 U.S.C. §103(a) as being
unpatentable over Hastings, Sherr, de Rafael, and Texas State Library.
Claims 61 and 62 depend from claim 56, whose rejection we have
reversed for the above reasons. For the same reasons, we will not sustain the
rejections of claims 61 and 62 over the cited prior art. Cf. In re Fritch, 972
F.2d 1260, 1266 (Fed. Cir. 1992) ("[D]ependent claims are nonobvious if the
independent claims from which they depend are nonobvious.").

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CONCLUSIONS
The rejections of claims 56-60, 63-65, and 78-85 under 35 U.S.C.
§103(a) as being unpatentable over Hastings, Sherr, and de Rafael and of
claims 61 and 62 under 35 U.S.C. §103(a) as being unpatentable over
Hastings, Sherr, de Rafael, and Texas State Library are reversed.

DECISION
The decision of the Examiner to reject claims 56-65 and 78-85 is
reversed.

REVERSED

ELD