Ex Parte Mester

Board of Patent Appeals and Interferences

Sep 8, 2008

10617472 (B.P.A.I. Sep. 8, 2008)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
___________ 2
3
BEFORE THE BOARD OF PATENT APPEALS 4
AND INTERFERENCES 5
___________ 6
7
Ex parte DAVID J. MESTER 8
___________ 9
10
Appeal 2007-4507 11
Application 10/617,472 12
Technology Center 3600 13
___________ 14
15
Decided: September 8, 2008 16
___________ 17
18
Before HUBERT C. LORIN, ANTON W. FETTING, and JOSEPH 19
A. FISCHETTI, Administrative Patent Judges. 20
21
FETTING, Administrative Patent Judge. 22
23
24
DECISION ON APPEAL 25
26
STATEMENT OF THE CASE 27
28
David J. Mester (Appellant) seeks review under 35 U.S.C. § 134 of a 29
final rejection of claims 1-20, the only claims pending in the application on 30
appeal. 31
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We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b) 1
(2002). 2
3
We AFFIRM. 4
The Appellant invented a way of processing customer claims seeking 5
repair or replacement after the expiration of a manufacturer's warranty 6
period or claims seeking recovery of ancillary costs incurred during the 7
warranty period against manufactured products. (Specification:¶ 0002). 8
An understanding of the invention can be derived from a reading of 9
exemplary claim 1, which is reproduced below [bracketed matter and some 10
paragraphing added]. 11
1. A method of processing a customer claim against a 12
manufacturer's product, said method includes the steps of: 13
[1] inputting the claim 14
through a computer 15
to a database 16
at a first management level; 17
[2] determining the monetary value of the claim; 18
[3] approving or denying the claim at the first management 19
level 20
when the monetary value of the claim is below a first 21
predetermined level; 22
[4] a second management level 23
acting to review 24
all claims input at the first management level and 25
acting to approve or deny the claim 26
when the monetary value of the claim is 27
above the first predetermined level and 28
below a second predetermined level; 29
[5] and a third management level 30
acting to review 31
all claims input at the first and second management 32
levels and 33
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acting to approve or deny the claim 1
when the monetary value of the claim is above the 2
second predetermined level. 3
This appeal arises from the Examiner’s final Rejection, mailed 4
January 26, 2006. The Appellant filed an Appeal Brief in support of the 5
appeal on June 5, 2006. An Examiner’s Answer to the Appeal Brief was 6
mailed on August 28, 2006. 7
8
PRIOR ART 9
The Examiner relies upon the following prior art: 10
Barr US 5,182,705 Jan. 26, 1993 11
Luedtke US 2003/0018497 A1 Jan. 23, 2003 12
Hicks US 2004/0111379 A1 Jun. 10, 2004 13
14
REJECTIONS 15
Claims 1-13, 15, 16, and 18-20 stand rejected under 35 U.S.C. § 16
103(a) as unpatentable over Hicks and Barr. 17
Claims 14 and 17 stand rejected under 35 U.S.C. § 103(a) as 18
unpatentable over Hicks, Barr, and Luedtke. 19
20
ISSUES 21
The issues pertinent to this appeal are 22
• Whether the Appellant has sustained its burden of showing that the 23
Examiner erred in rejecting claims 1-13, 15, 16, and 18-20 under 35 24
U.S.C. § 103(a) as unpatentable over Hicks and Barr. 25
• Whether the Appellant has sustained its burden of showing that the 26
Examiner erred in rejecting claims 14 and 17 under 35 U.S.C. § 27
103(a) as unpatentable over Hicks, Barr, and Luedtke. 28
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The pertinent issue turns on whether Barr and Hicks describe or 1
suggest hierarchical processing of customer claims. 2
3
FACTS PERTINENT TO THE ISSUES 4
The following enumerated Findings of Fact (FF) are believed to be 5
supported by a preponderance of the evidence. 6
Hicks 7
01. Hicks is directed to a highly secure system for identifying 8
parties over electronic networks. Member institutions create an 9
entity, referred to as the root entity, to establish a global, 10
interoperable network of financial institutions which operate as 11
certification authorities. As such, each participating financial 12
institution (each, a "participant") issues digital certificates to 13
customers and corporations and their employees, based on a set of 14
uniform system rules and business practices (Hicks ¶ 0003). 15
02. One of the principle functions of the Hicks system is to provide 16
warranties and assurances to participants in the network to limit 17
exposure as a result of warranty issuance. Warranty in the system 18
is defined as a warranty of certificate content and validity of 19
certificate at time of issuance. To ensure the viability of these 20
warranties, the system design imposes aggregate limits on the 21
exposure that any issuing participant may incur through explicit 22
warranties granted with respect to identity certificates issued by 23
that institution (Hicks ¶ 0041). 24
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03. Hicks relies on a trusted hierarchy for validating certificates. 1
An issuing participant is the primary obligor on warranties, while 2
a relying participant acts as an agent (Hicks ¶ 0105). 3
04. In Hicks, if an issuing participant agrees to issue a warranty, 4
then the issuing participant updates its total outstanding issuance 5
against its cap to reflect the new activity. At the end of the day, or 6
as required, issuing participant exports current status of its 7
warranty cap to root entity's Warranty Cap and Collateral 8
Manager (WCCM) which reflects all warranty certificates issuing 9
participant issued that day (Hicks ¶ 0129). 10
05. If a customer files a claim within the warranty time limit with a 11
relying participant, then the relying participant notifies the 12
corresponding issuing participant of a filed claim (Hicks ¶ 0147). 13
06. The relying participant notifies the both root entity, and issuing 14
participant's WCCM of the filed claim and the amount of claim. 15
The issuing participant determines whether it will pay. A root 16
entity sets conditions under which claims against warranties shall 17
be paid. The intent is to make sure there is a gold standard for 18
business. Each warranty issuer is provided the latitude to evaluate 19
and dispose of claims using its own procedures. However, 20
minimum standard criteria are established under which claims 21
would be paid (Hicks ¶ 0148). 22
07. If an issuing participant decides to pay the warranty claim, then 23
the issuing participant informs relying participant of its decision 24
(Hicks ¶ 0152). 25
Barr 26
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08. Barr is directed to substantially automating work management. 1
To illustrate Barr’s capabilities, Barr relies on the example of 2
processing of claims. Barr explicitly contemplates the application 3
of its system to other work environments (Barr 3:5-11). 4
09. Barr uses a Staff Table to provide, online, a record for each 5
member of the claim staff. Each record includes the current title, 6
diary limit, authority level and supervisor of the staff member as 7
well as the maximum case load of that member. The Staff Table 8
function is integrated with virtually every other system function. 9
The authority level, diary limit, and caseload limits of each staff 10
member are set by supervisors with appropriate authority and 11
entered into the Staff Tables. These records can be modified, 12
deleted or added as necessary (Barr 7:3-16). 13
10. When a payment transaction is processed, the system is advised 14
to accept the transaction and to proceed with the necessary steps to 15
print the check. If a claim handler's authority is exceeded by the 16
amount of the payment, it is necessary for a supervisor to review 17
the payment transaction before it is processed. Thus, the routing 18
of the unprocessed payment transaction to a supervisor insures 19
that the necessary authority will be secured prior to the printing of 20
the check. If a handler attempts to process a check for more than 21
his authorized amount, an alert message is generated and the 22
transaction is automatically routed to a supervisor (Barr 52:45-58). 23
Luedtke 24
11. Luedtke is directed to administering automatic type reinsurance 25
contracts (Luedtke ¶ 0001). 26
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12. The purpose of insurance is to redistribute risks. Insurers or 1
risk carriers assume portions of the risks of their customers or 2
insureds in exchange for premiums (Luedtke ¶ 0002). 3
Facts Related To The Level Of Skill In The Art 4
13. Neither the Examiner nor the Appellant has addressed the level 5
of ordinary skill in the pertinent arts of management information 6
systems, financial internal controls, business management and 7
organization design, and claims administration systems. We will 8
therefore consider the cited prior art as representative of the level 9
of ordinary skill in the art. See Okajima v. Bourdeau, 261 F.3d 10
1350, 1355 (Fed. Cir. 2001) (“[T]he absence of specific findings 11
on the level of skill in the art does not give rise to reversible error 12
‘where the prior art itself reflects an appropriate level and a need 13
for testimony is not shown’”) (quoting Litton Indus. Prods., Inc. v. 14
Solid State Sys. Corp., 755 F.2d 158, 163 (Fed. Cir. 1985). 15
Facts Related To Secondary Considerations 16
14. There is no evidence on record of secondary considerations of 17
non-obviousness for our consideration. 18
19
PRINCIPLES OF LAW 20
Claim Construction 21
During examination of a patent application, pending claims are 22
given their broadest reasonable construction consistent with the 23
specification. In re Prater, 415 F.2d 1393, 1404-05 (CCPA 1969); In 24
re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). 25
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Limitations appearing in the specification but not recited in the claim 1
are not read into the claim. E-Pass Techs., Inc. v. 3Com Corp., 343 F.3d 2
1364, 1369 (Fed. Cir. 2003) (claims must be interpreted “in view of the 3
specification” without importing limitations from the specification into the 4
claims unnecessarily). 5
Although a patent applicant is entitled to be his or her own 6
lexicographer of patent claim terms, in ex parte prosecution it must be 7
within limits. In re Corr, 347 F.2d 578, 580 (CCPA 1965). The applicant 8
must do so by placing such definitions in the Specification with sufficient 9
clarity to provide a person of ordinary skill in the art with clear and precise 10
notice of the meaning that is to be construed. See also In re Paulsen, 30 11
F.3d 1475, 1480 (Fed. Cir. 1994) (although an inventor is free to define the 12
specific terms used to describe the invention, this must be done with 13
reasonable clarity, deliberateness, and precision; where an inventor chooses 14
to give terms uncommon meanings, the inventor must set out any 15
uncommon definition in some manner within the patent disclosure so as to 16
give one of ordinary skill in the art notice of the change). 17
Claim Preamble 18
“[A] claim preamble has the import that the claim as a whole suggests 19
for it.” Bell Communications Research, Inc. v. Vitalink Communications 20
Corp., 55 F.3d 615, 620 (Fed. Cir. 1995). If the claim preamble, when read 21
in the context of the entire claim, recites limitations of the claim, or, if the 22
claim preamble is “necessary to give life, meaning[,] and vitality” to the 23
claim, then the claim preamble should be construed as if in the balance of 24
the claim. Kropa v. Robie, 187 F.2d 150, 152 (CCPA 1951). 25
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If, however, the body of the claim fully and 1
intrinsically sets forth the complete invention, 2
including all of its limitations, and the preamble 3
offers no distinct definition of any of the claimed 4
invention's limitations, but rather merely states, 5
for example, the purpose or intended use of the 6
invention, then the preamble is of no significance 7
to claim construction because it cannot be said to 8
constitute or explain a claim limitation. 9
10
Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1305 (Fed. Cir. 11
1999). 12
Obviousness 13
A claimed invention is unpatentable if the differences between it and 14
the prior art are “such that the subject matter as a whole would have been 15
obvious at the time the invention was made to a person having ordinary skill 16
in the art.” 35 U.S.C. § 103(a) (2000); KSR Int’l v. Teleflex Inc., 127 S.Ct. 17
1727, 1729-30 (2007); Graham v. John Deere Co., 383 U.S. 1, 13-14 18
(1966). 19
In Graham, the Court held that the obviousness analysis is bottomed 20
on several basic factual inquiries: “[(1)] the scope and content of the prior art 21
are to be determined; [(2)] differences between the prior art and the claims at 22
issue are to be ascertained; and [(3)] the level of ordinary skill in the 23
pertinent art resolved.” 383 U.S. at 17. See also KSR Int’l v. Teleflex Inc., 24
127 S.Ct. at 1734. “The combination of familiar elements according to 25
known methods is likely to be obvious when it does no more than yield 26
predictable results.” KSR, at 1739. 27
“When a work is available in one field of endeavor, design incentives 28
and other market forces can prompt variations of it, either in the same field 29
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or a different one. If a person of ordinary skill can implement a predictable 1
variation, § 103 likely bars its patentability.” Id. at 1740. 2
“For the same reason, if a technique has been used to improve one 3
device, and a person of ordinary skill in the art would recognize that it would 4
improve similar devices in the same way, using the technique is obvious 5
unless its actual application is beyond his or her skill.” Id. 6
“Under the correct analysis, any need or problem known in the field 7
of endeavor at the time of invention and addressed by the patent can provide 8
a reason for combining the elements in the manner claimed.” Id. at 1742. 9
Automation of a Known Process 10
It is generally obvious to automate a known manual procedure or 11
mechanical device. Our reviewing court stated in Leapfrog Enterprises Inc. 12
v. Fisher-Price Inc., 485 F.3d 1157 (Fed. Cir. 2007) that one of ordinary 13
skill in the art would have found it obvious to combine an old 14
electromechanical device with electronic circuitry 15
to update it using modern electronic components in 16
order to gain the commonly understood benefits of 17
such adaptation, such as decreased size, 18
increased reliability, simplified operation, and 19
reduced cost. . . . The combination is thus the 20
adaptation of an old idea or invention 21
. . . using newer technology that is commonly 22
available and understood in the art. 23
Id at 1163. 24
Obviousness and Nonfunctional Descriptive Material 25
Nonfunctional descriptive material cannot render nonobvious an 26
invention that would have otherwise been obvious. In re Ngai, 367 F.3d 27
1336, 1339 (Fed. Cir. 2004). Cf. In re Gulack, 703 F.2d 1381, 1385 (Fed. 28
Cir. 1983) (when descriptive material is not functionally related to the 29
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substrate, the descriptive material will not distinguish the invention from the 1
prior art in terms of patentability). 2
ANALYSIS 3
Claims 1-13, 15, 16, and 18-20 rejected under 35 U.S.C. § 103(a) as 4
unpatentable over Hicks and Barr. 5
Claim 1 6
The Examiner found that Hicks described steps [1] and [2] of claim 1, 7
and the approving or denying part of step [3] and that Barr described the 8
tiered approval level portion of step [3] and step [4] and that Barr’s tiered 9
approval levels suggested step [5] of claim 1. The Examiner found that Barr 10
suggested applying such tiered levels to Hicks for the purpose of more 11
detailed processing according to levels of authority, and concluded that it 12
was obvious to apply Barr to Hicks to produce the steps of claim 1 (Answer 13
3-4). 14
The Appellant contends that Hicks does not concern itself with claims 15
against a manufacturer’s product, access a monetary value of a claim or 16
process it through a predetermined series of management levels (Br. 13:Top 17
¶). The Appellant further argues that neither reference describe these, and 18
also do not describe the second and third levels in claim 1 (Br. 15:Last full 19
¶). The Appellant also argues that the references do not suggest the claim as 20
a whole, but require one to pick and choose based on hindsight (Br. 21
19:Second full ¶) and that Barr’s processing is not necessarily hierarchical, 22
but even if it was, combining Barr with Hicks would not result in a logical 23
and usable system (Br. 20:Bottom ¶ - 21:Top ¶). 24
We disagree with the Appellant’s contentions. Hicks produces digital 25
certificates and provides warranties for their validity (FF 02). Such digital 26
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certificates are within the scope of the broad term “manufacturer's product” 1
in claim 1, since the certificates are produced. Hicks enters claims via the 2
relying participant to the issuing participant, which may be designated as a 3
first level (FF 05 & 06). This entry includes the amount of the claim (FF 4
06). Thus, Hicks’ issuing participant accesses the monetary value of a claim 5
when processing. Hicks explicitly relies upon hierarchical processing for 6
validating certificates (FF 04), so Hicks does at least describe the use of 7
hierarchical techniques in business processing. 8
Barr is directed to substantially automating work management and 9
uses the processing of claims as an example (FF 08). Barr relies upon 10
authority levels for different staff members to apportion work. Barr also 11
uses a supervisory hierarchy to manage work. This hierarchy and authority 12
level scheme are stored in a staff table (FF 09). Claims beneath a staff 13
member’s authority level are processed by that staff member, but claims 14
above that level are reviewed by the staff member’s supervisor (FF 10). 15
Although Barr does not explicitly describe more than one level of 16
supervision, common sense and common accounting practice of internal 17
control suggests that where such different levels of authorization exist, the 18
authorization required escalates with significant escalation in amount. For 19
example, a claim of an order of magnitude comparable to a sizable portion 20
of an organization’s net worth would likely require senior management level 21
approval, and would certainly be beyond a first level supervisor’s authority 22
level. Thus, Barr’s first level of supervisory approval suggests the internal 23
control of matching signatory levels with authority levels and therefore 24
suggests additional signatory levels above a first level. 25
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Since Barr teaches techniques for automating work processes, such as 1
those in Hicks, no hindsight would be required to apply Barr to Hicks, only 2
the rudimentary analysis of where the workflow in Hicks occurs to which 3
Barr might apply. This is clearly within the capacity of one of ordinary skill 4
in the management arts. Since Barr’s description of hierarchical approval 5
levels for claim processing is merely an example of good internal control in 6
the business management arts, one of ordinary skill would have seen its 7
application to claim processing in Hicks. 8
Claims 19 and 20 9
Claims 19 and 20 contain the steps of claim 1 and also add a fourth 10
level, not necessarily hierarchical, of reviewing claims for accuracy and 11
completeness and informing the customer when a claim is denied. Claim 12
19’s preamble adds that a claim is for repair or replacement after warranty 13
expiration and claim 20’s preamble adds that the claim is for ancillary costs 14
under the warranty period. 15
The Examiner found that Hicks teaches these time frames (Answer 7) 16
and such a fourth level (Answer 11). The Examiner also found that the 17
preamble limitations were mere field of use limitations to be afforded no 18
patentable weight (Answer 12). The Appellant contends that the art fails to 19
describe these limitations, and that the use of the term “claim” in the body of 20
the claims requires that the preamble limitations be given patentable weight 21
(Br. 15:Bottom ¶ - 16:First ¶; 21:Second full ¶). 22
We disagree that these arguments show patentability. First, we take 23
up the preamble limitations. We find that the bodies of claims 19 and 20 24
fully and intrinsically set forth the complete invention, including all of their 25
limitations, and the preambles offer no distinct definition of any of the 26
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claimed invention's limitations, but rather merely state, for example, the 1
purpose or intended use of the invention. The preambles are thus of no 2
significance to claim construction because they cannot be said to constitute 3
or explain a claim limitation. Pitney Bowes, Inc. v. Hewlett-Packard Co., 4
182 F.3d 1298, 1305 (Fed. Cir. 1999). The Appellant’s argument that the 5
bodies of the claim use the word “claim” is misplaced, because the steps in 6
the body are fully set forth irrespective of what the claim may be for. The 7
nature of the claim has no functional effect upon the steps. 8
Now to the fourth level claimed. We find the step performed by this 9
level is essentially an accounting services function, which, like the use of 10
authorization levels, is merely proper exercise of accounting internal 11
controls, in this case, having independent verification of accounting 12
transactions. As the Examiner found, Hicks describes having such 13
independent verification by a Warranty Cap and Collateral Manager 14
(WCCM) (FF 04 & 06). Although the WCCM does not inform the customer 15
of claim denials, basic internal control practice of relying on a disinterested 16
party to communicate adverse decisions to a customer would have made this 17
a predictable part of the accounting services level. “The combination of 18
familiar elements according to known methods is likely to be obvious when 19
it does no more than yield predictable results.” KSR, 127 S.Ct. at 1739. 20
Claims 2-13, 15, 16, and 18 21
The Appellant relied upon its arguments in support of the independent 22
claims for support of the patentability of the dependent claims, and we 23
therefore find the Appellant has not overcome its burden as to the dependent 24
claims for the same reasons. 25
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The Appellant has not sustained its burden of showing that the 1
Examiner erred in rejecting claims 1-13, 15, 16, and 18-20 under 35 U.S.C. 2
§ 103(a) as unpatentable over Hicks and Barr. 3
Claims 14 and 17 rejected under 35 U.S.C. § 103(a) as unpatentable over 4
Hicks, Barr, and Luedtke. 5
The Appellant relied upon its arguments in support of the independent 6
claims for support of the patentability of the dependent claims, and we 7
therefore find the Appellant has not overcome its burden as to those 8
arguments for the same reasons. The Appellant also argued that Luedtke is 9
entirely distinct from the other references (Br. 16:Last full ¶). On its face, 10
this argument is no more than that Luedtke is a distinct reference. Since this 11
rejection is over a combination of references, such an argument has little 12
probative value. To the extent the Appellant is arguing that Luedtke is 13
distinct as non-analogous, we find that Luedtke is directed to insurance (FF 14
11). Insurance is the assumption of risk (FF 12). Since both Hicks and Barr 15
discuss such assumption of risk, Luedtke is at least in a similar field of 16
endeavor in designing systems to assist in the business of the assumption of 17
risk. 18
The Appellant has not sustained its burden of showing that the 19
Examiner erred in rejecting claims 14 and 17 under 35 U.S.C. § 103(a) as 20
unpatentable over Hicks, Barr, and Luedtke. 21
22
CONCLUSIONS OF LAW 23
The Appellant has not sustained their burden of showing that the 24
Examiner erred in rejecting claims 1-20 under 35 U.S.C. § 103(a) as 25
unpatentable over the prior art. 26
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On this record, the Appellant is not entitled to a patent containing 1
claims 1-20. 2
3
DECISION 4
To summarize, our decision is as follows: 5
• The rejection of claims 1-13, 15, 16, and 18-20 under 35 U.S.C. 6
§ 103(a) as unpatentable over Hicks and Barr is sustained. 7
• The rejection of claims 14 and 17 under 35 U.S.C. § 103(a) as 8
unpatentable over Hicks, Barr, and Luedtke is sustained. 9
No time period for taking any subsequent action in connection with 10
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv) (2007). 11
12
AFFIRMED 13
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hh 23
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