Ex Parte Laudato et alDownload PDFBoard of Patent Appeals and InterferencesOct 18, 201111695742 (B.P.A.I. Oct. 18, 2011) Copy Citation UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE BOARD OF PATENT APPEALS AND INTERFERENCES ____________ Ex parte ANTHONY C. LAUDATO and DOUGLAS K. NOBLE ____________ Appeal 2010-011007 Application 11/695,742 Technology Center 3600 ____________ Before: HUBERT C. LORIN, JOSEPH A. FISCHETTI, and MICHAEL W. KIM, Administrative Patent Judges. KIM, Administrative Patent Judge. DECISION ON APPEAL Appeal 2010-011007 Application 11/695,742 2 STATEMENT OF THE CASE This is an appeal from the final rejection of claims 1-17 and 19-25. We have jurisdiction to review the case under 35 U.S.C. §§ 134 and 6 (2002). The claimed invention is directed to systems and methods administering financial products, including variable universal life insurance products intended for the Bank-Owned Life Insurance (“BOLI”) and/or Corporate-Owned Life Insurance (“COLI”) market (Spec. 2:4-8). Claim 1, reproduced below, is further illustrative of the claimed subject matter. 1. A computer-implemented method for use with a computer of the type used to administer a variable universal life insurance product having a volatility reduction feature, said computer having a memory for storing data relating to a life insurance policy and a calculation engine for performing calculations necessary to the administration of a life insurance policy, comprising the steps of: a. providing a life insurance policy having a cash surrender value; and using the computer: b. creating a plurality of variable subaccounts associated with said policy, at least one of said subaccounts being an unsmoothed variable subaccount and at least one other of said subaccounts being a smoothed variable subaccount; c. for each unsmoothed variable subaccount; 1. storing a number of variable accumulation units associated with said subaccount in the memory; 2. storing a variable accumulation unit value associated with said subaccount in the memory; and 3. using the calculation engine, periodically determining an account value of said subaccount by multiplying the number of variable accumulation units by the variable accumulation unit value; d. for each smoothed variable subaccount; 1. storing a number of variable accumulation units associated with said subaccount in the memory; Appeal 2010-011007 Application 11/695,742 3 2. storing a plurality of variable accumulation unit values associated with said subaccount in the memory; and using the calculation engine; 3. calculating an average of stored variable accumulation unit values, and using said average to determine a target unit value; and 4. periodically determining a surrender value of said subaccount by multiplying the number of variable accumulation units by the target unit value; and e. using the calculation engine and the account value of the unsmoothed variable subaccount and the surrender value of the smoothed variable subaccount, periodically determining the cash surrender value of the insurance policy. Claims 1, 2, 8-11, and 24-25 stand rejected under 35 U.S.C. § 103(a) as unpatentable over Berlin (US Pub. No. 2005/0086085 A1, pub. Apr. 21, 2005) in view of Liu (US Pub. No. 2007/0244780 A1, pub. Oct. 18, 2007); and claims 3-7, 12-17, and 19-23 stand rejected under 35 U.S.C. § 103(a) as unpatentable over Berlin in view of Liu and Official Notice. We REVERSE. ANALYSIS We are persuaded the Examiner erred in asserting that a combination of Berlin and Liu renders obvious independent claims 1, 11, 24, and 25, because the Examiner has not set forth an adequate rationale for combining Berlin and Liu (App. Br. 10-13; Reply Br. 2-4). The Examiner asserts that [i]t would be obvious to one skilled in the art at the time of the invention to combine the variable life insurance product of Berlin with the volatility reduction smoothing of Liu. The rationale is that the claimed invention is simply a combination of old elements, and in the combination each element performs the same function as it does separately, and the results of the combination are predictable. Appeal 2010-011007 Application 11/695,742 4 (Exam’r’s Ans. 5). The combination of Berlin and Liu is thus the simple combination of old elements. In this combination, the use of moving averages as taught in Liu is applied to one of a plurality of subaccounts as taught by Berlin. The resulting combination is predictably a VUL insurance product having both unsmoothed and smoothed subaccounts. (Exam’r’s Ans. 8-9). Independent claims 1, 11, 24, and 25 recite that the volatility reduction smoothing is only applied to some of the sub-accounts. The Examiner has not provided, either by citations to Berlin or Liu, or a convincing line of reasoning, any rationale as to why it would have been obvious to apply the volatility reduction smoothing of Liu to only some of the sub-accounts of Berlin. Instead, the Examiner has set forth a mere conclusory statement that such a combination would have been predictable without any articulated reasoning with some rational underpinning as to why (Exam’r’s Ans. 5, 8-9). See In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006) (“rejections on obviousness grounds cannot be sustained by mere conclusory statements; instead, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness”); In re Oetiker, 977 F.2d 1443, 1447 (Fed. Cir. 1992) (to support the conclusion that the claimed combination is directed to obvious subject matter, either the references must expressly or impliedly suggest the claimed combination or the examiner must present a convincing line of reasoning as to why the artisan would have found the claimed invention to have been obvious in light of the teachings of the references); KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007) (“[t]o facilitate review, this analysis should be made explicit”). Appeal 2010-011007 Application 11/695,742 5 Accordingly, because the Examiner has not met the initial burden of setting forth a proper case of prima facie obviousness, we will not sustain the rejections of independent claims 1, 11, 24, and 25, or dependent claims 2-10, 12-17, and 19-23. See Oetiker, 977 F.2d at 1445. REVERSED hh Copy with citationCopy as parenthetical citation