Ex Parte Lich et al

Board of Patent Appeals and Interferences

Nov 27, 2006

10600853 (B.P.A.I. Nov. 27, 2006)

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was not written for publication in and is not binding
precedent of the Board.

UNITED STATES PATENT AND TRADEMARK OFFICE
___________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
___________

Ex parte SHARAD NISHITH and GULSHAN GARG
___________

Appeal No. 2006-2286
Application No. 09/165,352
Technology Center 3600
___________

ON BRIEF
___________

Decided: November 27, 2006
___________

Before CRAWFORD, HORNER, and FETTING, Administrative Patent Judges.
FETTING, Administrative Patent Judge.

DECISION ON APPEAL

This is a decision on appeal under 35 U.S.C. §134 from the examiner's final
rejection of claims 77 through 87 and 93, claims 88 through 92 having been
withdrawn which are all of the claims pending in this application.
We REVERSE and ENTER A NEW GROUND OF REJECTION UNDER
37 CFR § 41.50(b).
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Appeal Number: 2006-2286
Application Number: 09/165,352

BACKGROUND

The appellants’ invention relates to a loan processing system (Specification,
p. 1). An understanding of the invention can be derived from a reading of
exemplary claim 77, which is reproduced below.
77. A method for electronically processing loan data for a loan
received from a user, the method comprising:
importing loan data from a loan origination software system into a
computer system;
automatically notifying the user of a need to fulfill suspense
conditions; and upon satisfaction of suspense conditions,
generating at the computer system a credit score based on the
imported loan data;
performing at the computer system an automated underwriting
procedure using the generated credit score and the imported
loan data;
performing at the computer system a risk-based pricing
operation using loan conditions established by the automated
underwriting procedure; and
providing the user with an automated rate lock opportunity
from the computer system over a network.

PRIOR ART
The prior art references of record relied upon by the examiner in rejecting
the appealed claims are:
Norris 5,870,721 February 9, 1999
Staff, Interest Rate Locks Not Hedges, Mortgage Marketplace,, Bethesda, vol. 20,
iss. 47, p. 1, December 8, 1997 (Mortgage Marketplace)
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Appeal Number: 2006-2286
Application Number: 09/165,352

In addition, we make the following art of record:
Rothenberg, Subject:Mortgage Loan, Personal Finance Digest, Vol. 5, No. 33, July
15, 1998

REJECTION
Claims 77 through 87 and 93 stand rejected under 35 U.S.C. § 103(a) as
obvious over Norris and Mortgage Marketplace.
Rather than reiterate the conflicting viewpoints advanced by the examiner
and the appellants regarding the above-noted rejection, we make reference to the
examiner's answer (mailed February 6, 2006) for the reasoning in support of the
rejection, and to appellants’ brief (filed November 21, 2005) and reply brief (filed
March 28, 2006) for the arguments thereagainst.

OPINION
In reaching our decision in this appeal, we have given careful consideration
to the appellants’ specification and claims, to the applied prior art references, and
to the respective positions articulated by the appellants and the examiner. As a
consequence of our review, we make the determinations that follow.
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Appeal Number: 2006-2286
Application Number: 09/165,352

Claims 77 through 87 and 93 rejected under 35 U.S.C. § 103(a) as obvious over
Norris and Mortgage Marketplace.
As to independent claims 77, 81 and 93, the appellants argue that there is no
motivation to combine interest rate locks with Norris, because Norris describes
immediate approval of mortgages, which inherently would not require any locks
(Br. P. 8), and because the terms and conditions of the loan are established only
after the approval of the loan (Br. p. 9-10), and argue that Norris does not teach
using risk in determining the terms of the loan, but only in approving the loan (Br.
Pp. 12-13) and that Norris fails to describe automatic notification (Br. P. 14).
The examiner responds that as to motivation, Norris teaches that a loan may
be delayed a day, which would thus require locks (Answer p. 4), and as to use of
risk, Norris describes its use in pricing at col. 8 lines 29-47 and as to automated
notification, Norris describes this col. 7 lines 55-65 and col. 8 lines 23-28 (Answer,
p. 6).
We first note that regarding the motivation, the examiner is correct in that
Norris at col. 8, line 23 to 28, states
Not every loan decision will be clear. In the event the analysis by
neural network 17 is inconclusive, the borrower will be called back by
communications processor 30 and asked for an additional business
day to qualify the loan application and, if the request if granted, the
time for the return call will be arranged.
Thus, in such a case motivation to lock in interest rates as described in
Mortgage Marketplace would be present. Therefore, we find the appellant's
arguments to be unpersuasive.
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Appeal Number: 2006-2286
Application Number: 09/165,352
As to automated notification, we again find the examiner is correct in that
Norris states at col. 7 lines 55 to 65, Norris states
In an alternate embodiment, borrowers can apply for a loan using a
personal computer 34 and a modem 36 by contacting controller 10 via
telephone 12 through a communications link. Controller 10 will
interact using the monitor of computer 34 to prompt the borrower who
can type in the information needed and indicate responses to
controller 10 for the latter to obtain the credit report and process the
loan. The document can be received via modem 36 into computer 34,
printed using printer 37. The documentation can be returned to
controller 10 by facsimile 18 when the borrower is so equipped.

Such automated interaction is noted as being exemplary of notifying a user
to fulfill suspense conditions as claimed. Therefore, we find the appellants’
arguments to be unpersuasive.
However, at this point we must part company with the examiner. As to the
use of risk in pricing, the portion of Norris cited by the examiner at col. 8, lines 29-
47, states
If the loan can be granted, communications processor 30 (or controller
10 if the borrower is using a personal computer) will confirm the
amount that can be loaned, the monthly payment and the term of the
loan. The disclosures required under applicable consumer lending
laws and other documentation can be signed in ink or, in a kiosk,
using an electronic pen and then returned by facsimile, by electronic
data file transmission, or by overnight mail.

The controller/processor 10 via the communication processor 30 will
review with the borrower the information relevant to the loan, such as
the account number to which the direct deposit will be made and the
name of the deposit institution, the account number and name of the
automatic withdrawal institution, the date of the month and the first
month the automatic withdrawal will begin, the address and payee if
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Appeal Number: 2006-2286
Application Number: 09/165,352
the check is not intended for deposit into an account, late charges that
could apply, the finance charge, the annual percentage rate, the total
cost of all the payments, and the total amount financed.

We find no teaching or suggestion of using risk to price the loan in this
portion. Indeed all references to risk in Norris refer to approving predefined terms
rather than computing terms of the loan, as has been argued by the appellants.
Therefore, we find the appellants’ arguments to be persuasive that the applied
references fail to describe all the elements in the independent claims, and by
inference, all dependent claims as well, and the examiner has not made a prima
facie case for unpatentability.
Accordingly we do not sustain the examiner's rejection of claims 77 through
87 and 93 rejected under 35 U.S.C. § 103(a) as obvious over Norris and Mortgage
Marketplace.

New Grounds of Rejection Under 37 CFR § 41.50(b)
Pursuant to 37 CFR § 41.50(b), we enter the following new grounds of
rejection:
Independent claims 77, 81 and 93 are rejected under 35 U.S.C. § 103 as
unpatentable as obvious over Norris and Rothenberg.
In contrast with the lack of Norris describing use of risk in pricing loans, we
note that Rothenberg, provided such a teaching that “[t]here are now lenders who
again do true risk-based lending, and if your history is superb, they may lend at a
lower rate.” Rothenberg also teaches that a lock may be placed on the rate as “you
can hold a rate without extra cost for 60 days,” and that such loans may be
provided automatically on line “if you’d like to try getting your loan online.”
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Appeal Number: 2006-2286
Application Number: 09/165,352
As the examiner has pointed out, Norris also describes data importing (fig.
26), notification (col. 7 lines 55-65), scoring (col. 4 lines 43-53), and underwriting
(col. 8 lines 29-47).
It would have been obvious to one of ordinary skill in the art to have applied
Rothenberg’s teachings of the attributes of good competitive loans to Norris’
teachings of online loans because of Rothenberg’s taught application of
competitive loans to online access methods, for which a person of ordinary skill in
the art would have read Norris for details on the design aspects of such systems.
Accordingly, we reject the three independent claims 77, 81 and 93 under
35 U.S.C. § 103 as obvious over Norris and Rothenberg. We leave the
consideration of the applicability of these references to the remaining dependent
claims to the examiner.
REMARKS
The examiner is advised to consult the following documents available online
from the U.S. Comptroller of the Currency regarding details behind many of the
loan practices that are pertinent to the claimed subject matter:
1998 Survey of Credit Underwriting Practices1, September 1998
Loan Portfolio Management Comptroller’s Handbook2, April 1998
Also, the Comptroller of the Currency web site (www.occ.treas.gov) has
many other publications pertinent to the financial aspects of loans and banking.

1 http://www.occ.treas.gov/cusurvey/scup98.pdf
2 http://www.occ.treas.gov/handbook/lpm.pdf
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Appeal Number: 2006-2286
Application Number: 09/165,352

CONCLUSION
To summarize,
• The rejection of claims 77 through 87 and 93 rejected under 35 U.S.C.
§ 103(a) as obvious over Norris and Mortgage Marketplace is not sustained.
• A new ground of rejection of independent claims 77, 81 and 93 under
35 U.S.C. § 103 as obvious over Norris and Rothenberg is entered pursuant
to 37 CFR § 41.50(b).
This decision contains a new ground of rejection pursuant to 37 CFR
§ 41.50(b) (effective September 13, 2004, 69 Fed. Reg. 49960 (August 12, 2004),
1286 Off. Gaz. Pat. Office 21 (September 7, 2004)). 37 CFR § 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 appellants, 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
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 . . . .
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Appeal Number: 2006-2286
Application Number: 09/165,352
No time period for taking any subsequent action in connection with this
appeal may be extended under 37 CFR § 1.136(a)(1)(iv).
REVERSED AND NEW GROUND OF REJECTION UNDER 37 CFR § 41.50(b)

MURRIEL E. CRAWFORD )
Administrative Patent Judge )
)
)
)
) BOARD OF PATENT
LINDA E. HORNER ) APPEALS
Administrative Patent Judge ) AND
) INTERFERENCES
)
)
)
ANTON W. FETTING )
Administrative Patent Judge )

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Appeal Number: 2006-2286
Application Number: 09/165,352
FOLEY & LARDNER LLP
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AWF/jrg

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