Ex Parte Leistensnider et al

Board of Patent Appeals and Interferences

Sep 26, 2006

09373786 (B.P.A.I. Sep. 26, 2006)

The opinion in support of the decision being entered today was not w
for publication and is
ritten
not binding precedent of the Board.

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte JAMES LEISTENSNIDER and THOMAS LOOP
____________

Appeal No. 2006-2031
Application No. 09/373,786
Technology Center 3600
____________

HEARD: September 12, 2006
____________

Before OWENS, LEVY, and FETTING, Administrative Patent Judges.
LEVY, Administrative Patent Judge.

DECISION ON APPEAL
This is a decision on appeal from the examiner's final
rejection of claims 1-9, which are all of the claims pending in
this application.

We REVERSE.
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Application No. 09/373,786

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BACKGROUND
The appellants’ invention relates to a method and system of
creating a portfolio of stock equities based on market
capitalization (specification, page 1).
Claim 1 is representative of the invention, and is reproduced as
follows:
1. A computer-implemented method for creating a portfolio
of equity stocks, comprising the steps of:

determining the composition of a predetermined broad based
stock index by accessing a database and creating a list of the
stocks making up said index;

obtaining from said database for each stock in said index,
data relating to at least market capitalization and sales of the
company issuing the stock;

sorting said index list by market capitalization and setting
the lowest market capitalization among a predetermined number of
stocks in said sorted index list as a predetermined value; and

sorting said index list by sales and placing into said
portfolio, until a predetermined number of stocks are reached, a
stock having the highest sales of said sales-sorted list and
having a market capitalization not less than said predetermined
value.

The prior art references of record relied upon by the
examiner in rejecting the appealed claims are:
O’Shaughnessy 5,978,778 Nov. 2, 1999
(filed Dec. 20, 1997)
Bloom et al. (Bloom) 6,061,663 May 9, 2000
(filed Apr. 21, 1998)

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Claims 1, 4 and 7 stand rejected under 35 U.S.C. § 102(e) as
being anticipated by O’Shaughnessy.
Claims 2, 5 and 8 stand rejected under 35 U.S.C. § 103(a)
as being unpatentable over O’Shaughnessy.
Claims 3, 6 and 9 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over O’Shaughnessy in view of Bloom.
Rather than reiterate the conflicting viewpoints advanced by
the examiner and the appellants regarding the above-noted
rejections, we make reference to the answer (mailed October
14, 2005) for the examiner's complete reasoning in support of the
rejections, and to the brief (filed July 29, 2002), supplemental
brief (filed November 5, 2002) and reply brief (filed December
13, 2005) for the appellants’ arguments thereagainst.
Only those arguments actually made by appellants have been
considered in this decision. Arguments which appellants could
have made but chose not to make in the brief have not been
considered. See 37 CFR § 41.37(c)(1)(vii)(eff. Sept. 13, 2004).

OPINION
In reaching our decision in this appeal, we have carefully
considered the subject matter on appeal, the rejections advanced
by the examiner, and the evidence of anticipation and obviousness
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relied upon by the examiner as support for the rejections. We
have, likewise, reviewed and taken into consideration, in
reaching our decision, appellants' arguments set forth in the
briefs along with the examiner's rationale in support of the
rejections and arguments in rebuttal set forth in the examiner's
answer.
Upon consideration of the record before us, we make the
determinations which follow. We begin with the rejection of
claims 1, 4 and 7 under 35 U.S.C. § 102(e) as being anticipated
by O’Shaughnessy. We note at the outset that appellants group
the claims together (supplemental brief, page 2). Accordingly,
we select claim 1 as representative of the group. By way of
background, we note that to anticipate a claim, a prior art
reference must disclose every limitation of the claimed
invention, either explicitly or inherently. In re Schreiber,
128 F.3d 1473, 1477, 44 USPQ2d 1429, 1431 (Fed. Cir. 1997). As
stated in In re Oelrich, 666 F.2d 578, 581, 212 USPQ 323, 326
(CCPA 1981) (quoting Hansgirg v. Kemmer, 102 F.2d 212, 214, 40
USPQ 665, 667 (CCPA 1939)) (internal citations omitted):
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.
If, however, the disclosure is sufficient to show that the
natural result flowing from the operation as taught would
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“[a] disclosure of ‘selecting stocks of companies with database
records [sic, “,”] indicating ‘market capitalization in excess of
a desired capital amount’ as alleged in the Office action does
not establish that O’Shaughnessy anticipates claim 1 under 35
U.S.C § 102.” Appellants further assert (brief, page 10) that
“the S&P Compustat DataBase is a database of all stocks in
existence, and therefore is not a ‘group of stocks that consists
result in the performance of the questioned function, it
seems to be well settled that the disclosure should be
regarded as sufficient.

Appellants assert (brief, pages 5 and 6) that the stock
database of O’Shaughnessy is not a broad based stock index but
rather is a database of all active stocks. It is argued that the
databases of O’Shaughnessy are databases of all stocks in
existence and cannot be characterized as broad based stock
indexes. It is further argued that O’Shaughnessy fails to
disclose the steps of sorting the index list by market
capitalization, sorting the list by sales and (brief, page 6)
“comparing each successive stock having the highest sales in the
list with the predetermined value to determine stocks that are
acceptable for inclusion in the portfolio, up to a maximum number
of stocks.”
Appellants additionally assert (brief, page 8) that
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Appellants respond (reply brief, page 1) that the examiner
confuses the S&P Compustat database of stocks with the S&P 500
index, and that O’Shaughnessy fails to disclose the sorting
steps. It is argued (reply brief, page 3) that the examiner has
failed to produce or point to any evidence to support the
assertion that Morningstar includes the S&P 500 and the DJIA.
of an index of different stocks designed to reflect the movement
of the entire market,’ as defined in the Office action.”
The examiner responds (answer, page 8) that with respect to
appellants’ assertion the O’Shaughnessy does not show a broad
based stock index, that the S&P Compustat/S&P 500 is a broad
based stock index, and (answer, page 9) that the Morningstar
database includes both the broad based S&P 500 Index and the Dow
Jones Industrial Average (DJIA). With regard to appellants’
assertion that O’Shaughnessy does not show the sorting steps, the
examiner asserts (answer, page 10) that
specifically O’Shaughnessy discloses selecting stocks
of companies with database records indicating “market
capitalization in excess of a desired capital amount.”
And the business practice of choosing capitalization
weighted indices, in creating a stock portfolio is an
old and well-established business practice and
different indices can be used alternatively or
simultaneously in an investment portfolio. This
practice is designed to diversify the criteria in an
investment portfolio and attract more investors
investing in various stock databases.

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From our review of O’Shaughnessy, we find, for the reasons
which follow, that the reference fails to establish a prima facie
case of anticipation of claim 1. We begin with the issue of
whether O’Shaughnessy discloses a broad based stock index. The
examiner states that the Morningstar database includes the S&P
500 index and the DJIA, but as noted by appellants, has provided
no evidence to support the assertion. On the other hand,
appellants’ statement that the examiner has provided no evidence
is not a traversal of the examiner’s statement as there is no
statement by appellants that the examiner’s assertion is untrue
or that they do not know the examiner’s statement to be true. In
any event, we find that the limitation of “broad based stock
index” is met for three reasons. The first is that the S&P
Compustat database is not a listing of all stocks in existence as
asserted by appellants (brief, page 10) because some stocks are
privately held and other stocks may be on different exchanges.
The second is that the S&P Compustat database will include the
stocks of the S&P 500 index as part of the database. From the
comprising language of the claim, we find that the claim does not
preclude the index from being part of a larger database.
Thirdly, O’Shaughnessy also includes the Value Line database, and
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col. 11, line 64, the Board has located, from the web archive,
the Value Line website as it existed on May 13, 19981. On the
web site we find a listing of stock funds, at least some of
which, such as the Value Line Fund, are, in our view, broad based
stock indexes. However, it is at this point that we part company
with the examiner.

1 A copy of the document is enclosed with the Decision.
From our review of O’Shaughnessy, we find that the reference
selects stocks based on market capitalization in excess of
$150,000,000 (col. 12, lines 47 and 48) or in excess of a desired
amount (col. 11, lines 26 and 27) and selects stocks based on
sales that are 1.5 times the database mean (col. 12, lines 62 and
63) or price-to-sales ratios lower than a desired amount (col.
11, line 28). In addition, O’Shaughnessy sorts the records
identifying the stocks which meet the criteria in descending
order into a sorted list and makes available from the top of the
sorted list a listing of a number of stocks (col. 15, lines 26-
30). However, O’Shaughnessy sorts the stocks according to one
year appreciation in stock price (col. 15, lines 26 and 27) or
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dividend yield (col. 11, line 61). Because O’Shaughnessy does
not sort based on market capitalization or sales, but rather
selects based on market capitalization and sales and sorts based
on one year appreciation and dividend, O’Shaughnessy fails to
anticipate the language of claim 1, or independent claims 4 and 7
which include similar language. We add that neither does
O’Shaughnessy sort by setting lowest market capitalization among
a predetermined number of stocks in the sorted list as a
predetermined value. Accordingly, we cannot sustain the
rejection of claims 1, 4 and 7 under 35 U.S.C. § 102(e) as being
anticipated by O’Shaughnessy.
We turn next to the rejection of claims 2, 5 and 8 under 35
U.S.C. § 103(a) as being unpatentable over O’Shaughnessy. We
cannot sustain the rejection of these claims as there is no
evidence in the record that it would have been obvious to an
artisan to modify O’Shaughnessy to sort based on market
capitalization and sales, as recited in claims 1,4 and 7, from
which claims 2, 5 and 8 depend.
We turn next to the rejection of claims 3, 6 and 9 under 35
U.S.C. § 103(a) as being unpatentable over O’Shaughnessy in view
of Bloom. We cannot sustain the rejection of these claims
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because Bloom fails to make up for the basic deficiencies of
O’Shaughnessy.

CONCLUSION
To summarize, the decision of the examiner to reject claims
1-9 under 35 U.S.C. § 103 is reversed.

REVERSED

TERRY J. OWENS ) Administrative
Patent Judge )
) )
) )BOARD OF
PATENT STUART S. LEVY ) APPEALS
Administrative Patent Judge ) AND
)INTERFERENCES ) )
) ANTON W. FETTING
) Administrative
Patent Judge )
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