Ex Parte Harris

Board of Patent Appeals and Interferences

Sep 19, 2007

09662398 (B.P.A.I. Sep. 19, 2007)

The opinion in support of the decision being entered
today is not binding precedent of the Board.

UNITED STATES PATENT AND TRADEMARK OFFICE
__________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
__________

Ex parte WILLIAM F. HARRIS
__________

Appeal No. 2007-2377
Application No. 09/662,398
Technology Center 3600
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Decided1: September 19, 2007
__________

Before WILLIAM F. PATE, III, HUBERT C. LORIN, and
ANTON W. FETTING, Administrative Patent Judges.

LORIN, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE

This is an appeal from a decision of the Examiner rejecting claims
58-76. 35 U.S.C. § 134 (2002). We have jurisdiction under 35 U.S.C.
§ 6(b) (2002).

1 An oral hearing was conducted on Sep. 13, 2007.
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Application 09/662,398

The invention is directed to a computer system for processing product
price requests and placing products orders over the internet. Specification
1:1-3.
Claims 58-76 are rejected under 35 U.S.C. §102(e) as being
anticipated by Rothman (US Patent Application Publication 2002/0072984).

We REVERSE. 2

Claims 58 and 70 are the independent claims.
58. A server system for generating an order for a product,
comprising:
a receiver component that receives, on behalf of a
manufacturer, requests to order a product from a customer and for
receiving financial authorization from a distributor, a request
including a product code that identifies the product and a customer
identification that identifies a customer, and a financial authorization
comprising an acknowledgment from the distributor verifying a
customer account even though the request is received by the receiver
component in a manner independent of the distributor;
a data storage medium storing information for a plurality of
products, including a customer price associated with each of the
plurality of products;
an order placement component that retrieves from the data
storage medium information for the identified product and that uses
the retrieved information to place an order from the manufacturer of
the identified product; and
an order fulfillment component that completes a purchase of the
product in accordance with the order placed by the order placement

2 Our decision will make reference to Appellants’ Supplemental Appeal
Brief (“Appeal Br.,” filed Jun. 30, 2006), the Examiner’s Answer
(“Answer,” mailed Sep. 6, 2006), and to the Reply Brief (“Reply Br.,” filed
Nov. 6, 2006).
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component including arrangement for shipping by the manufacturer
and billing of the distributor.

70. A server system for generating an order for a product,
comprising:
a receiver component that receives, on behalf of a
manufacturer, requests to order a product from a customer, a request
including a product code that identifies the product and a
customer identification that identifies a customer;
a data storage medium storing information for a plurality of
products and storing information for a plurality of agents associated
with the product, where the stored product information includes a
customer price associated with the product, where the stored agent
information includes at least one predetermined variable associated
with each of the plurality of agents; and
a commission component that determines a commission and
assigns the commission to one of the plurality of agents based on at
least one of the plurality of predetermined variables even though the
request is received by the receiver component in a manner
independent of the agents and even though the request is fulfilled in a
manner independent of the agents.

A. Issue
The issue is whether Appellant has shown that the Examiner erred in
holding Rothman anticipates the claimed subject matter.

B. Findings of Fact
The record supports the following findings of fact (FF) by a
preponderance of the evidence.
1. Appellant argued, in part, that Rothman does not describe a receiver
component “for receiving financial authorization from a distributor… a
financial authorization comprising an acknowledgment from the distributor
verifying a customer account even though the request is received by the
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receiver component in a manner independent of the distributor,” as required
by claim 58 and the claims that depend from it. Appeal Br. 7-9.
2. Rothman does not explicitly describe a receiver component “for
receiving financial authorization from a distributor… a financial
authorization comprising an acknowledgment from the distributor verifying
a customer account even though the request is received by the receiver
component in a manner independent of the distributor” (claim 58).
3. The Examiner responded by arguing that Rothman “teaches a system
wherein the user can authorize payment through the web site and elect to
pick up the product at the distributor[,]… the user may provide payment
information to the local distributor[,] … [t]he distributor can then report the
local sale to the central server[,] … [and] the payment can be authorized in
conjunction with a credit application or financing provided by the seller or
through a third party credit provider.” Answer 7. Based on these teachings,
the Examiner concluded that Rothman “teaches a receiver component that is
capable of receiving financial authorization from a distributor.” Answer 7.
These aspects of the Rothman system show that the receiver in
Rothman is capable of receiving financial authorization from a third
party, including the distributor, because the receiver is in
communication with the distributor and other third parties regarding
payment and sale information while the receiver is receiving purchase
orders and information from the user.
Answer 7.
4. Appellant argued that “the Rothman ‘984 published application does
not teach or suggest that any distributor would receive a commission based
upon this sale and fulfillment that were completed independent of the
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distributor” and thus does not teach the commission component of claim 70
and the claims that depend from it. Appeal Br. 9.
5. Rothman does not explicitly describe a commission component “that
determines a commission and assigns the commission to one of the plurality
of agents based on at least one of the plurality of predetermined variables
even though the request is received by the receiver component in a manner
independent of the agents and even though the request is fulfilled in a
manner independent of the agents” (claim 70).
6. The Examiner responded by arguing that Rothman “teaches that
compensation to the distributors may include monetary payments,
commissions, bonuses and/or ownership interests in the seller’s corporation[,
and] …[t]he employees of distributors and distributors in Rothman can be
compensated based on a ranking of the distributor/employee compared to
other distributors and employees participating with the seller.” Answer 8-9.
Based on these teachings, the Examiner concluded that Rothman “teaches a
commission component that is capable of determining a commission and
assigning a commission to one of many agents even though the request is
fulfilled in a manner independent of the agents.” Answer 8.
Thus, the commission component is capable of determining a
commission and assigning a commission even though the request is
fulfilled in a manner independent of the agent because it can assign
compensation, i.e. commissions, based on ownership interests and/or
ranking, which is independent of whether the request is fulfilled by
the distributor. Thus, the Rothman publication anticipates a
commission component.
Answer 9.

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C. Principles of Law
1. Anticipation is a question of fact. In re Schreiber, 128 F.3d 1473,
1477, 44 USPQ2d 1429, 1431 (Fed. Cir. 1997).
2. It is well settled that in order for the examiner to establish a prima
facie case of anticipation, each and every element of the claimed invention,
arranged as required by the claim, must be found in a single prior art
reference, either expressly or under the principles of inherency. See
generally, Schreiber, 128 F.3d at 1477, 44 USPQ2d at 1431; Diversitech
Corp. v. Century Steps, Inc., 850 F.2d 675, 677-78, 7 USPQ 1315, 1317
(Fed. Cir. 1988); Lindemann Maschinenfabrik GMBH v. American Hoist
and Derrick, 730 F.2d 1452, 1458, 221 USPQ 481, 485 (Fed. Cir. 1984).
3. There must be no difference between the claimed invention and the
reference disclosure, as viewed by a person of ordinary skill in the field of
the invention. Scripps Clinic & Research Found. v. Genentech Inc., 927 F.2d
1565, 1576, 18 USPQ2d 1001, 1010 (Fed. Cir. 1991).
4. “In relying upon the theory of inherency, the examiner must provide a
basis in fact and/or technical reasoning to reasonably support the
determination that the allegedly inherent characteristic necessarily flows
from the teachings of the applied prior art.” Ex parte Levy, 17 USPQ2d
1461, 1464 (Bd. Pat. App. & Inter. 1990) (emphasis in original).
5. ``To invalidate a patent by anticipation, a prior art reference normally
needs to disclose each and every limitation of the claim. ... However, a prior
art reference may anticipate when the claim limitation or limitations not
expressly found in that reference are nonetheless inherent in it. ... Under the
principles of inherency, if the prior art necessarily functions in accordance
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with, or includes, the claimed limitations, it anticipates.'' Atlas Powder Co. v.
Ireco Inc., 190 F.3d 1342, 1347, 51 USPQ2d 1943 , 1946 (Fed. Cir. 1999).
6. ``If the prior art reference does not expressly set forth a particular
element of the claim, that reference still may anticipate if that element is
`inherent' in its disclosure. To establish inherency, the extrinsic evidence
`must make clear that the missing descriptive matter is necessarily present in
the thing described in the reference, and that it would be so recognized by
persons of ordinary skill.' ... `Inherency, however, may not be established by
probabilities or possibilities. The mere fact that a certain thing may result
from a given set of circumstances is not sufficient.' '' In re Robertson, 169
F.3d 743, 745, 49 USPQ2d 1949, 1950-51 (Fed. Cir. 1999).

D. Analysis
We will not sustain the rejection. The rejection is under 35 U.S.C.
§102 and thus the claims are rejected on the ground that Rothman anticipates
the claimed subject matter.
There is no dispute that Rothman does not explicitly describe a
receiver component, as per claim 58, “for receiving financial authorization
from a distributor… a financial authorization comprising an
acknowledgment from the distributor verifying a customer account even
though the request is received by the receiver component in a manner
independent of the distributor” or a commission component, as per claim 70,
“that determines a commission and assigns the commission to one of the
plurality of agents based on at least one of the plurality of predetermined
variables even though the request is received by the receiver component in a
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manner independent of the agents and even though the request is fulfilled in
a manner independent of the agents.”
Accordingly, the only question is whether Rothman describes these
components, as claimed, under principles of inherency. Under that theory,
anticipation of the claimed subject matter will have been established if the
Examiner shows that the characteristics for the receiver and compensation
components necessarily flow from the teachings of Rothman and thus
inherent to the Rothman system. We are in agreement with the Appellant
that the Examiner has not made that showing
The Examiner concluded, based on teachings in Rothman, that the
Rothman receiver and compensation components are capable of exhibiting
the characteristics claimed for these components. Since a component may
not necessarily exhibit a characteristic that it is capable of exhibiting, the
Examiner has shown that the characteristics claimed for the receiver and
compensation components do not necessarily follow from, and thus are not
inherent to, the teachings of the prior art. The Examiner’s apparent reasoning
that the prior art is capable of exhibiting the characteristics claimed for the
receiver and compensation components appears to be rational. But the
question before us is not one of obviousness but one of anticipation under
the theory of inherency. Inherency may not be established by probabilities or
possibilities. The mere fact that a certain thing may result from a given set of
circumstances is not sufficient.
The Examiner has also argued that
[c]laims directed to an apparatus must be distinguished from the prior
art in terms of structure rather than function, [citing In re Danly, 263
F.2d 844, 847, 120 USPQ 582, 91 (CCPA 1959)]. A claim containing
a “recitation with respect to the manner in which a claimed apparatus
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is intended to be employed does not differentiate the claimed
apparatus from a prior art apparatus” if the prior art apparatus teaches
all the structural limitations of the claims. Ex parte Masham, 2
USPQ2d 1657 (Bd. Pat. App. § Inter. 1987). Thus the structural
limitations of claims 58 and 70, including a receiver component, a
data storage medium, an order placement component, an order
fulfillment component interface, and a commission component are
disclosed in the Rothman publication.
Answer 6-7. This argument does not persuade us to affirm the rejection. The
difficulty with this argument is that, while claims directed to an apparatus
must be distinguished from the prior art in terms of structure rather than
function, features of an apparatus may be recited structurally or functionally
(see In re Schreiber, 128 F.3d 1473, 1477-78, 44 USPQ2d 1429, 1431-32
(Fed. Cir. 1997))3. Here the Examiner has not made a claim construction
analysis showing that the functional limitations in the claims do not impose
structural limitations to the components of the claimed server. Claims must
be treated as a whole and all limitations must be considered. There is no
basis in law for not considering limitations in an apparatus claim simply
because they are functional in nature. Moreover, these functional limitations
describe the manner in which the apparatus is programmed, and “if a
machine is programmed in a certain new and unobvious way, it is physically

3 Ex parte Masham, which the Examiner cited in support of the argument,
not only is not a precedential decision of the Board but is not entirely
relevant to the facts of this case. Masham involved claims to a mixer with
recitations to the material being worked upon and the intended manner of
employing the apparatus. The instant claims are directed to a computer
system with recitations to functions various components of the system must
perform. The system is designed to perform these functions (Specification,
pp. 8-9). Furthermore, in Masham the Board construed the claim and clearly
explained why recitations of intended use did not impose structural
limitations to the mixer. Here there is no such analysis.
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different from the machine without that program; its memory elements are
differently arranged. The fact that these physical changes are invisible to the
eye should not tempt us to conclude that the machine has not been changed.”
In re Bernhart, 417 F.2d 1395 at 1400 (CCPA 1969).

Appellant has shown that the Examiner erred in holding Rothman
anticipates the claimed subject matter.

DECISION
The decision of the Examiner rejecting claims 58-76 under 35 U.S.C.
§102(e) as being anticipated by Rothman is reversed.

REVERSED

vsh

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