Ex Parte Lozano

Board of Patent Appeals and Interferences

Jun 20, 2011

10821610 (B.P.A.I. Jun. 20, 2011)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
10/821,610 04/09/2004 Carlos Andres Lozano F-8678 1547
24131 7590 06/20/2011
LERNER GREENBERG STEMER LLP
P O BOX 2480
HOLLYWOOD, FL 33022-2480
EXAMINER
MERCHANT, SHAHID R
ART UNIT PAPER NUMBER
3694
MAIL DATE DELIVERY MODE
06/20/2011 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte CARLOS ANDRES LOZANO
___________

Appeal 2009-012018
Application 10/821,610
Technology Center 3600
____________

Before HUBERT C. LORIN, ANTON W. FETTING, and
MEREDITH C. PETRAVICK, Administrative Patent Judges.

PETRAVICK, Administrative Patent Judge.

DECISION ON APPEAL
Appeal 2009-012018
Application 10/821,610
2
STATEMENT OF THE CASE
Carlos Andres Lozano (Appellant) seeks our review under 35 U.S.C. § 134
(2010) of the final rejection of claims 2-15 and 17-22. We have jurisdiction
under 35 U.S.C. § 6(b) (2010).

SUMMARY OF DECISION
We REVERSE and enter a new ground of rejection pursuant to 37
C.F.R. § 41.50(b).
1

THE INVENTION
This invention is “to make available . . . a financial credit card that
provides the services that existing debit and credit cards offer today; with the
exception that instead of paying interest and fees to credit lenders, the
consumer can opt to pay himself or herself for the use of his or her own
funds.” Specification 6:11-15.
Claims 2 and 22, reproduced below, are illustrative of the subject
matter on appeal.
2. A method of managing a credit, comprising the
steps of:
(a) in a system including a device for
performing electronic transactions, establishing a
stored credit on behalf of a consumer,
corresponding to an amount advanced by the
consumer;

1
Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed Feb. 12, 2009) and Reply Brief (“Reply Br.,” filed Jun. 1, 2009),
and the Examiner’s Answer (“Answer,” mailed Mar. 31, 2009).

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(b) setting parameters for repayment of
amounts borrowed from the stored credit, wherein
the parameters for repayment include parameters
for at least one of a payment of interest and a
payment of late fees, the parameters being set by
the consumer;
(c) obtaining a financial card, for providing
access by the consumer to the stored credit;
(d) causing a first amount to be debited from
the stored credit, as a result of an electronic
transaction reflecting a financial transaction using
the financial card, resulting in a remaining credit;
(e1) after step (d), paying, by the consumer,
of at least one of interest and late fees on the first
amount, in accordance with the parameters set in
step (b), wherein the at least one of interest and a
late fee is added to the remaining credit to form a
new stored credit available to the consumer; and
(e2) providing information relating to the
new stored credit formed in step (e1) to the
consumer.

22. A financial institution managing savings,
comprising:
a record of a credit stored by a consumer at
the financial institution;
a debit card affiliated with the financial
institution, use of which provides the consumer
with access to said stored credit; and
a billing system for managing said stored
credit according to parameters set by the
consumer, wherein said billing system debits said
stored credit in accordance with purchases made
using said debit card;
said billing system generating a statement
detailing said debits to said stored credit and any
interest or late fees due in accordance with said
parameters, said billing system further debiting an
amount of said debits from the record of the stored
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credit and crediting said stored credit in the
amount of any repayments of debits, payments of
late fees and payments of interest made by the
consumer; and
the financial institution transmitting said
statement to the consumer.

THE REJECTIONS
The Examiner relies upon the following as evidence of
unpatentability:
Bonalle US 2003/0041025 A1 Feb. 27, 2003
AM. BANKERS ASS’N, THE BANK CREDIT CARD BUSINESS, (2d ed.
1996) (hereinafter “ABA”).
Orchard Bank Secured FAQ, (2001) http://web.archive.org/web/
20010409085314/orchardbank.com/cards/obbanksecfaq.html (hereinafter
“Orchard Bank”).
Capitol Card, PSECU, http://web.archive.org/web/20010303165444/
www.psecu.com/products/loans/visa.htm (hereinafter “PSECU”).
Eileen Ambrose, 401 (k) too nice to pinch, THE SUN, Aug. 20, 2000, at
D1 (hereinafter “Ambrose”).

The following rejections are before us for review:
1. Claims 2-15 and 17-21 are rejected under 35 U.S.C. § 112, first
paragraph, as failing to comply with the written description
requirement.
2. Claims 2-15 and 17-21 are rejected under 35 U.S.C. § 101 as being
directed to non-statutory subject matter.
3. Claims 2-4, 6, 9, 10, 13-15, and 17-22 are rejected under 35 U.S.C.
§ 103(a) as being unpatentable over ABA, Bonalle, and Ambrose.
4. Claims 5, 11, and 12 are rejected under 35 U.S.C. § 103(a) as being
unpatentable over ABA, Bonalle, Ambrose, and Orchard Bank.
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5. Claims 7 and 8 are rejected under 35 U.S.C. § 103(a) as being
unpatentable over ABA, Bonalle, Ambrose
2
, and PSECU.

FINDINGS OF FACT
We adopt the Examiner’s finding of fact related to the ABA, Bonalle,
and Ambrose references.

ANALYSIS
The rejection of claims 2-15 and 17-21 under § 112, first paragraph for as
failing to comply with the written description requirement.
The Appellant and the Examiner dispute whether the Specification
fails to provide written description support for the limitations of “in a system
a device for performing electronic transactions” and “an electronic
transaction reflecting a financial transaction” recited in claims 2 and 15.
App. Br. 7-16, Reply Br. 2-17, and Answer 14-16.
We find that the Examiner has failed to establish that the Specification
lacks written description support for these limitations. The Examiner seems
to conclude that the Specification lacks written description for the
limitations at issue because the Examiner “could not find any words like
device, reflecting or electronic transaction” in the original disclosure.
Answer 5. However, use of the exact terms is not required. All that is
necessary to satisfy the description requirement is to show that one is “in

2
We note that the omission of Bonalle and Ambrose in the heading of the
rejection of claims 7 and 8 under 35 U.S.C. § 103(a) is a typographical error
as these references are referred to in the body of the rejection. See Answer
13.
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possession” of the invention. The decision in Lockwood v. Am. Airlines, Inc.,
107 F.3d 1565 (Fed. Cir. 1997) accurately states the test.
One shows that one is “in possession” of the
invention by describing the invention, with all its
claimed limitations, not that which makes it
obvious. Id. . . . One does that by such descriptive
means as words, structures, figures, diagrams,
formulas, etc., that fully set forth the claimed
invention. Although the exact terms need not be
used in haec verba, see Eiselstein v. Frank, 52 F.3d
1035, 1038 . . . (Fed.Cir.1995) (“[T]he prior
application need not describe the claimed subject
matter in exactly the same terms as used in the
claims . . . . ”), the specification must contain an
equivalent description of the claimed subject
matter.
Lockwood v. Am. Airlines, Inc., 107 F.3d at 1572.
Second, we note that the Examiner’s rejection seems to be based on
the claims requiring a computer or processor to perform all of the steps
recited in claim 2 and 15. The Examiner states that the passages cited by the
Appellants “do not disclose or support a computer or processor performing
any steps like establishing a stored credit, setting parameters, causing a first
amount to be debited . . .” Answer 15-16. However, we note that neither
claim 2 nor claim 15 requires this. For example, claim 2 and 15 merely
require that the financial institution or system where the account is
established include “a device for performing electronic transaction,” but do
not require that the store credit be established using that device. Further,
neither claim 2 nor claim 15 requires the debiting of a first amount be done
by a computer or processor, but merely that the debiting be done “as a result
of an electronic transaction.”
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Therefore, we find that the Examiner has not established that the
Specification fails to provide written description support for claims 2 and 15
when properly construed as discussed above. Accordingly, we find that the
rejection of claims 2-15 and 17-21 under 35 U.S.C. § 112, first paragraph, as
failing to comply with the written description requirement is overcome.

The rejection of claim 2-15 and 17-21 under 35 U.S.C. § 101 as being
directed to non-statutory subject matter.
The Examiner and the Appellant dispute whether process claims 2-15 and
17-22 are directed to non-statutory subject matter. Answer 6 and 17, App.
Br. 17-19, and Reply Br. 17-18.
We find that claims 2-15 and 17-22 are drawn to non-statutory subject
matter as they encompass an abstract idea. The law in the area of patent-
eligible subject matter for process claims has recently been clarified by the
Supreme Court in Bilski v. Kappos, 130 S. Ct. 3218 (2010). The Court held
that the term “process” as used in 35 U.S.C. § 101, does not categorically
exclude business methods. Bilski, 130 S. Ct. at 3228-29.
The Court is unaware of any argument that the “ordinary,
contemporary, common meaning,” . . . of “method” excludes
business methods. Nor is it clear what a business method
exception would sweep in and whether it would exclude
technologies for conducting a business more efficiently.
Bilski, 130 S. Ct. at 3222 (citation omitted). “At the same time, some
business method patents raise special problems in terms of vagueness and
suspect validity.” Bilski, 130 S. Ct. at 3229. (citing eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 397 (2006) (Kennedy, J., concurring)).
In searching for a limiting principle, this Court's precedents on
the unpatentability of abstract ideas provide useful tools. See
infra, at 12-15. Indeed, if the Court of Appeals were to succeed
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in defining a narrower category or class of patent applications
that claim to instruct how business should be conducted, and
then rule that the category is unpatentable because, for instance,
it represents an attempt to patent abstract ideas, this conclusion
might well be in accord with controlling precedent.
Bilski, 130 S. Ct. at 3229.
Claims 2-15 and 17-21 are drawn to business methods. Taking claim
2 as representative, the broadest reasonable construction of the claimed
process in light of the Specification as it would be interpreted by one of
ordinary skill in the art is that it provides a series of instructions that do no
more than: establish a stored credit, have the consumer set parameters for
the payment of interest or late fees, obtain a financial card, debit an amount
from the stored credit, have the consumer pay one of interest and late fees on
the amount, add the interest or late fees to the remaining credit, and provide
information about the remaining credit to the consumer. Claim 2
encompasses any use of the concept of establishing a stored credit, having
the consumer set parameters for the payment of interest or late fees,
obtaining a financial card, debiting an amount from the stored credit, having
the consumer pay one of interest and late fees on the amount, adding the
interest or late fees to the remaining credit, and providing information about
the remaining credit to the consumer.
We now turn to the question of whether the claimed process subject
matter is patent-eligible under 35 U.S.C. § 101.
Various factors must be considered and weighed when analyzing
claims as a whole before reaching a conclusion on patent subject matter
eligibility.
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The factors relevant in this case are the lack of an express or implied
recitation in the claims to a particular machine or transformation and that the
claims are a mere statement of a general concept.
The Appellant argues that Claim 2 requires a machine since it recites
“in a system including a device for performing electronic transactions” and
“an electronic transaction.” App. Br. 17-19 and Reply Br. 17-18. These
terms suggest at best a nominal use of a general purpose machine and do not
require the use of a particular machine.
Claim 2 does not recite any transformations.
As we have reasonably broadly construed it, the subject matter of
claim 2 is a series of instructions for establishing a stored credit, having the
consumer set parameters for the payment of interest or late fees, obtaining a
financial card, debiting an amount from the stored credit, having the
consumer pay one of interest and late fees on the amount, adding the interest
or late fees to the remaining credit, and providing information about the
remaining credit to the consumer. The vague instructions listed in the claim
do no more than instruct how business should be conducted; that is, to
establish a stored credit, have the consumer set parameters for the payment
of interest or late fees, obtain a financial card, debit an amount from the
stored credit, have the consumer pay one of interest and late fees on the
amount, add the interest or late fees to the remaining credit, and provide
information about the remaining credit to the consumer. The claim covers
any use of this concept. In the words of Gottschalk v. Benson, 409 U.S. 63,
72 (1972), the claimed process “would wholly pre-empt the [concept of
establishing a stored credit, having the consumer set parameters for the
payment of interest or late fees, obtaining a financial card, debiting an
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amount from the stored credit, having the consumer pay one of interest and
late fees on the amount, adding the interest or late fees to the remaining
credit, and providing information about the remaining credit to the
consumer] and in practical effect would be a patent on the [concept] itself.”
For the foregoing reasons, based upon consideration of all the relevant
factors with respect to claims 2-15 and 17-22 as a whole, claims 2-15 and
17-22 are held to claim an abstract idea and are therefore rejected as
ineligible subject matter under 35 U.S. C. § 101.
However, since our reasoning differs from that of the Examiner, we
shall reverse the Examiner’s rejection of claims 2-15 and 17-22 under 35
U.S.C. § 101 and designate our reasoning as a new ground of rejection.

The rejections of claims 2-4, 6-9, 10, 13-15 and 17-22 under 35 U.S.C.
§ 103(a) as being unpatentable over ABA, Bonalle, and Ambrose.
Claims 2-4, 6, 9, 10, 13-15, and 17-21
The Appellant disputes whether the Examiner’s combination of ABA,
Bonalle, and Ambrose teaches the similar methods recited in claims 2 and
15. App. Br. 20-30 and Reply Br. 19-21.
The Examiner relies upon a combination of: ABA, which discloses a
standard debit card account (ABA 183-185); Ambrose, which teaches that a
person can borrow from and repay money from their 401(k) account at a rate
set by the 401(k) (Ambrose 1-2); and Bonalle, which teaches that a
consumer can customize a transaction card by choosing when to substitute a
set promotional interest rate for a set rate (Bonalle [0011]). Answer 7-8.
See also Answer 17-20. The Examiner reasons that it would have been
obvious “to allow a consumer to set interest rates because it attracts new
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consumers into becoming card members as taught by Bonalle (see paragraph
3) and [to] credit a payment of interest to an account to form a new available
balance as taught by Ambrose (see Ref. X).” Answer 8. While Ambrose
does teach “credit[ing] a payment of interest to an account to form a new
available balance” as the Examiner asserts, the Examiner fails to provide any
rationale with logical underpinnings as to whether one of ordinary skill in
the art would have been led by these references or the general knowledge in
the art to take this teaching of Ambrose and modify the standard debit card
account of ABA to include the payment of interest or fees, that are set by the
consumer, back into the debit card account. See Answer 6-8 and 17-20.
“[R]ejections 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.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)
(citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006)).
We note that in response to the Appellant’s arguments the Examiner
states that ABA in view of Bonalle would teach setting a repayment
parameter when using a debit card to make a purchase and that the
motivation to combine these references “would be that it encourages savings
on the part of the consumer because the repayment is made back to the
consumer’s own checking account or stored credit.” Answer 18-19.
However, neither ABA nor Bonalle contain a teaching of crediting the debit
card account for the interest paid as ABA was merely cited as teaching a
standard debit account (ABA 183-185) and Bonalle was cited as teaching
setting an interest parameter for a standard credit card account (Bonalle
[0011]). See Answer 6-8 and 17-20.
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Accordingly, we find that the rejection of claims 2 and 15, and claims
3, 4, 6, 9, 10, 13, 14, and 17-21, dependent thereon, under 35 U.S.C.
§ 103(a) as being unpatentable over ABA, Bonalle, and Ambrose is
overcome

Claim 22
Claim 22 is indefinite for the reasons discussed below. The rejection
of claim 22 under 35 U.S.C. § 103(a) must fall, pro forma, because it
necessarily is based on speculative assumptions as to the meaning of the
claim. See In re Steele, 305 F.2d 859, 862-63 (CCPA 1962). Accordingly,
we reverse the rejection of claim 22 under 35 U.S.C. § 103(a) as being
unpatentable over ABA, Bonalle, and Ambrose.

The rejection of claims 5, 11, and 12 under 35 U.S.C. § 103(a) as being
unpatentable over ABA, Bonalle, Ambrose, and Orchard Bank.
This rejection is directed to claims dependent on claim 2, whose
rejection we have reversed above. For the same reasons, we will not sustain
the rejections of claims 5, 11, and 12 over the cited prior art. Cf. In re Fritch,
972 F.2d 1260, 1266 (Fed. Cir. 1992) (“[D]ependent claims are nonobvious
if the independent claims from which they depend are nonobvious.”).

The rejection of claims 7 and 8 under 35 U.S.C. § 103(a) as being
unpatentable over ABA, Bonalle, Ambrose, and PSEC.
This rejection is directed to claims dependent on claim 2, whose
rejection we have reversed above. For the same reasons, we will not sustain
the rejections of claims 7 and 8 over the cited prior art. Cf. Fritch, 972 F.2d
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at 1266 (“[D]ependent claims are nonobvious if the independent claims from
which they depend are nonobvious.”).

NEW GROUND OF REJECTION
Pursuant to 37 C.F.R. § 41.50(b), we enter a new ground of rejection
on claim 22. We reject claim 22 under 35 U.S.C. § 112, second paragraph
as failing to particularly point out and distinctly claim the subject matter
which Appellant regards as the invention.
Claim 22 is rejected under 35 U.S.C. § 112, second paragraph as
indefinite, because it is unclear what statutory class the invention falls into.
A claim is considered indefinite under 35 U.S.C. § 112, second paragraph, if
it does not reasonably apprise those skilled in the art of its scope. See IPXL
Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377, 1383-84 (Fed. Cir.
2005). It is unclear whether claim 22 encompasses an apparatus or a
method. Claim 22 is directed to “[a] financial institution managing savings”
and includes structural elements (e.g. “a record,” “a debit card,” and “a
billing system”) and steps (i.e. “the financial institution transmitting” and
“said billing system generating.”) It is unclear whether claim 22 is directed
to an apparatus called a financial institution which is structured to manage
savings, or to a method of managing savings being performed by a financial
institution. This causes the claim to be indefinite because it does not
reasonably apprise those skilled in the art of the statutory class of invention
to which the claim is directed. See IPXL Holdings, 430 F.3d at 1384 and In
re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303 (Fed. Cir.
2011).
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We find that claim 22 does not reasonably apprise those skilled in the
art of its scope because it is ambiguous as to what statutory class of subject
matter is encompassed by the claim. Only when a claim remains insolubly
ambiguous without a discernible meaning after all reasonable attempts at
construction must a court declare it indefinite. Exxon Research & Eng’g Co.
v. U.S., 265 F.3d 1371, 1375 (Fed. Cir. 2001). Accordingly, we reject claim
22 under 35 U.S.C. § 112, second paragraph for failing to particularly point
out and distinctly claim the subject matter which the Appellant regards as
the invention.

DECISION
The decision of the Examiner to reject claims 2-15 and 17-22 is
reversed. We enter new grounds of rejection on claims 2-15 and 17-22.
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 C.F.R. § 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 matter reconsidered by the examiner, in which
event the proceeding will be remanded to the examiner . . . .
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• (2) Request rehearing. Request that the proceeding be reheard under
§ 41.52 by the Board upon the same record . . . .

REVERSED; 37 C.F.R. § 41.50(b)

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