Ex Parte Laudato et al

Board of Patent Appeals and Interferences

Oct 18, 2011

11695742 (B.P.A.I. Oct. 18, 2011)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
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Ex parte ANTHONY C. LAUDATO and DOUGLAS K. NOBLE
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Appeal 2010-011007
Application 11/695,742
Technology Center 3600
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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

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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;
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Application 11/695,742

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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.
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Application 11/695,742

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(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”).
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Application 11/695,742

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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

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