Ex Parte Leavitt

Board of Patent Appeals and Interferences

Mar 28, 2008

10301755 (B.P.A.I. Mar. 28, 2008)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte HAROLD O. LEAVITT
____________

Appeal 2007-4054
Application 10/301,755
Technology Center 3600
____________

Decided: March 28, 2008
____________

Before WILLIAM F. PATE, III, ANTON W. FETTING and JOSEPH A.
FISCHETTI, Administrative Patent Judges.

FISCHETTI, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant seeks our review under 35 U.S.C. § 134 of the Examiner’s final
rejection of claims 1-4. This appeal arises from the Examiner’s Final Rejection,
mailed 2/17/2005. The Appellant filed an Appeal Brief in support of the appeal on
7/25/2005. An Examiner’s Answer to the Appeal Brief was mailed on 3/1/2006. A
Reply Brief was filed on 5/17/2006.

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We have jurisdiction under 35 U.S.C. § 6(b). (2002)
Appellant claims a method and apparatus for effectuating bilateral seller-
driven commerce. (Specification 1:2-3)
Claim 1, reproduced below, is representative of the subject matter on appeal.

1. A method of effectuating bilateral buyer-driven commerce comprising a
plurality of sellers, specific buyers and one independent third party through which
the sellers and specific buyers communicate comprising the steps of:

defining a large group of specific buyers all of which must be beneficiaries of
Social Security benefits, thereby increasing the purchasing power of this group, as
effected through the third party;

at the third party, receiving and transmitting sales offers from prospective sellers to
the group of specific buyers;

permitting members of the group of specific buyers to accept any of the sales
offers in order to establish a contract.

The Examiner relies upon the following as evidence of unpatentability:

Nieber US 6,418,419 B1 Jul. 9, 2002
Melchione US 5,930,764 Jul. 27, 1999

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In addition to the prior art cited by the Examiner, we also refer to the
following additional prior art.
Alon US 7,146,330 B1 Dec. 5, 2006
(35 U.S.C. § 102 (e) date Feb. 8, 1999)
The 35 U.S.C. § 103(a) rejection based on Nieber in view of Melchione
Claims 1 and 3 are the sole independent claims from which all dependent
appealed claims depend. Claims 1-4 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over Nieber in view of Melchione.
At the onset, we agree with the Examiner that the particular demographic of
the group, e.g., Social Security recipients, is not pertinent to patentability here
particularly because the claims do not tie any characteristic of this demographic
with the recited transaction. See, In re Hopkins, 342 F.2d 1010, 1015 (CCPA
1965).
However, independent claims 1 and 3 also require, inter alia, “…defining a
large group of specific buyers all of which must be beneficiaries of Social Security
benefits, thereby increasing the purchasing power of this group, as effected through
the third party....” Claims 1 and 3 thus require a group of buyers large enough to
leverage better prices in the market place. The prior art must disclose either
explicitly or inherently a purposely created buying group, such as Appellant’s
Social Security recipients, which together create increased purchasing power of its
members. The Examiner indicated this limitation is an inherent characteristic of
Nieber or Melchione (Answer 9, 15).
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We cannot agree that the limitation of defining a large group of specific
buyers thereby increasing the purchasing power of this group is inherent in either
Nieber or Melchione because given the types of systems disclosed in Nieber and
Melchione, it is not apparent that such price leveraging buying groups would
be present in them. It “…must be 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. Continental Can Co. v. Monsanto Co., 948
F.2d 1264, 1268 (Fed. Cir. 1991).
More specifically, Nieber discloses contingency trading of securities, such as
convertible bond "swaps", risk arbitrage, and pairs in both listed and over-the-
counter markets. (Nieber, col. 1, ll. 9-13). Such securities do not respond to the
number of people represented by a trader, but only to price (Nieber, col. 8 ll. 35-
37). Also, such securities cannot be viewed as having the same pricing flexibility
as Appellant’s items e.g., drugs, housing, food, clothing, travel and leisure pursuits
(Specification 4:21-22) because the value of these securities is set by contract and
due dates.
Likewise, in Melchione there is no disclosure of a group which is created for
increasing the purchasing power of the group. To the contrary, Melchione is
directed to a bank identifying sales targets for which it can expand its market
(Melchione, col. 5 ll. 31-42). Nowhere is it discussed in Melchione to connect the
customers with each other in order to allow them to obtain more purchasing power-
that simply would not be in the bank’s interests. In fact, Melchione discusses
making it more difficult for the buyer to change banks (Melchione, col. 5 ll. 49-50)
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thereby deterring the formation of groups. Since we do not find the limitation of
“defining a large group of specific buyers…, thereby increasing the purchasing
power of this group” is inherently disclosed in Nieber or Melchione, we cannot
sustain the rejection of claims 1-4 under 35 U.S.C. § 103(a). In re Spada, 911 F.2d
705, 708.
Since we have not sustained the rejection of independent claims 1 and 3, we
cannot sustain the rejection of claims 2 and 4 which depend on claims 1 and 3
respectively.
35 U.S.C. § 112, First Paragraph Rejection
We find that the Specification conveys with reasonable clarity to those
skilled in the art that, as of the filing date sought, applicant was in possession of
the invention as now claimed. Vas-Cath, Inc. v. Mahurkar, 935 F.2d 1555, 1563-
64 (Fed. Cir. 1991). Specifically, we find that the Specification on page 5, lines 1-
3 makes reasonably clear to use social security recipients as a class or group to
leverage prices wherein it states “[t]herefore, the specific class mentioned above
should have no problem achieving the same leverage in the United States.”
Moreover, the Specification goes further to enumerate products which are
appurtenant to retirees, namely, drugs, housing, food, clothing, travel and leisure
pursuits (Specification 4:21-22). Such a description underscores that Social
Security beneficiaries would be leveraging prices for products for which they have
greatest need and thus able to generate the greatest demand to effect leverage.
We do not agree with the Examiner that by limiting the group to Social
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Security recipients Appellant teaches away from “increasing the purchasing power
of this group” because by limiting the number of people that can join the group, the
purchasing power of the group effectively decreases (Appeal Br. 6). This is
because the claims only require that the group be of a number sufficient to increase
the purchasing power of this group, which we consider accomplished by virtue of
the tens of millions of people presently a part of and who will continue to become
part of the Social Security class. Thus, we cannot sustain the rejection of claims 1-
4 under 35 U.S.C. § 112, First Paragraph Rejection.
35 U.S.C. § 112, Second Paragraph Rejection
The test for definiteness under 35 U.S.C. § 112, second paragraph, is
whether “those skilled in the art would understand what is claimed when the claim
is read in light of the specification.” Orthokinetics, Inc. v. Safety Travel Chairs,
Inc., 806 F.2d 1565, 1576, 1 USPQ2d 1081, 1088 (Fed. Cir. 1986) (citations
omitted). Since we find that the Specification provides an understanding for
“defining a large group of specific buyers all of which must be beneficiaries of
Social Security benefits, thereby increasing the purchasing power of this group, as
effected through the third party”, we thus we cannot sustain the rejection of claims
1-4 under 35 U.S.C. § 112, Second Paragraph Rejection based on this language..

New Ground under § 41.50(b)
We reject claim 1 under 35 U.S.C. § 103(a) as being unpatentable over Alon
(US 7,146,330).
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Alon discloses defining a large group of specific buyers thereby increasing
the purchasing power of this group (Alon col. 5 ll. 12-22), as effected through the
third party (system controller 509); the third party system controller 509 receives
and transmits sales offers from prospective sellers to the group of specific buyers
(Alon, col. 6, ll. 27-32) and permits members of the group of specific buyers to
accept any of the sales offers in order to establish a contract (Alon, col. 6, ll. 34-
36). However, Alon fails to disclose the large group of specific buyers all of which
must be beneficiaries of Social Security benefits.
But, Alon discloses that group size controls obtaining price reduction (Alon,
col. 2 ll. 32-34). Alon suggests that there can be some common relationship
between members of the group, e.g., that group members be friends (Alon, col. 5
ll. 21). We find that varying the characteristics of the group, from one made up of
friends as disclosed in Alon, to one made up of fellow Social Security recipients, is
a predictable variation based on market forces (reducing burden on government by
increasing buying power of social security recipients (Specification 4:11-16)). See
KSR Int’l v. Teleflex Inc., 127 S.Ct. at 1740. “When a work is available in one field
of endeavor, design incentives and other market forces can prompt variations of it,
either in the same field or in a different one. If a person of ordinary skill in the art
can implement a predictable variation, § 103 likely bars its patentability.”
Accordingly, we leave to the Examiner to consider the above findings and
whether any of the subject matter of the depending claims would have been
obvious to one having ordinary skill in the art at the time of the invention in view
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of the teachings of Alon in combination with the other pertinent art of which the
Examiner is or becomes aware.

CONCLUSIONS OF LAW
We cannot sustain the rejections of claims 1-4 under 35 U.S.C. § 103(a) as
unpatentable over Nieber and Melchione.
We cannot sustain the rejections of claims 1-4 under 35 U.S.C. § 112,
Second Paragraph.
We cannot sustain the rejections of claims 1-4 under 35 U.S.C. § 112, First
Paragraph.
This decision contains a new ground of rejection pursuant to 37 C.F.R.
§ 41.50(b) (effective September 13, 2004, 69 Fed. Reg. 49960 (August 12, 2004),
1286 Off. Gaz. Pat. Office 21 (September 7, 2004)). 37 C.F.R. § 41.50(b) provides
“[a] new ground of rejection pursuant to this paragraph shall not be considered
final for judicial review.”
37 CFR § 41.50(b) also provides that the appellant, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, must exercise one of the
following two options with respect to the new ground of rejection to avoid
termination of the appeal as to the rejected claims:
• (1) Reopen prosecution. Submit an appropriate amendment of the claims so
rejected or new evidence relating to the claims so rejected, or both, and have the
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matter reconsidered by the examiner, in which event the proceeding will be
remanded to the examiner . . . .
• (2) Request rehearing. Request that the proceeding be reheard under
§ 41.52 by the Board upon the same record . . . .
No time period for taking any subsequent action in connection with this
appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv) (2006).
REVERSED; NEW GROUNDS ENTERED 37 C.F.R. § 41.50(b)

JRG

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