Ex Parte O et al

Board of Patent Appeals and Interferences

Aug 13, 2008

10209811 (B.P.A.I. Aug. 13, 2008)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte TIMOTHY P. O’HAGAN, GREGORY CANDA, and
JAMES E. TRAXLER
____________

Appeal 2007-3871
Application 10/209,811
Technology Center 3600
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Decided: August 13, 2008
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Before HUBERT C. LORIN, LINDA E. HORNER and JOSEPH A. FISCHETTI,
Administrative Patent Judges.

FISCHETTI, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner’s final
rejection of claims 26-38. We have jurisdiction under 35 U.S.C. § 6(b). (2002)

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SUMMARY OF DECISION
We AFFIRM.

THE INVENTION
Appellants’ claim a customer information network for a retail store which is
said to optically extract indicia from a coupon and employ the extracted indicia
within the network to facilitate customer shopping, manufacturer marketing and
store efficiency. (Specification 1:20-23).
Claim 26, reproduced below, is representative of the subject matter on
appeal.
26. A shopping system comprising:
a host computer system that stores and retrieves shopping records of
customers, the host computer system further stores and accesses product
information;
a portable terminal that can be used by a plurality of different customers and
is in communication with the host computer within a retail environment;
an interface comprising a virtual keyboard through which a customer using
the portable terminal communicates with the portable terminal, at least in part to
identify himself or herself to the portable terminal; and
a customer identifier that identifies the customer using the portable terminal
based on personal data that is unique to the customer and is entered by the
customer into the portable terminal and relayed to the host computer system;
wherein the portable terminal remains in the store after termination of a
shopping session by the customer for use by a subsequent customer.

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THE REJECTIONS
The Examiner relies upon the following as evidence of unpatentability:
Sugiyama US 5,870,716 Feb. 9, 1999
Sloane US 5,918,211 Jun. 29, 1999
Swartz US 5,923,735 Jul. 13, 1999

The following rejections are before us for review.
1. Claims 26-30, 32, 34-381 stand rejected under 35 U.S.C. § 103(a) over
Sloane in view of Swartz.

2. Claim 31 stands rejected under 35 U.S.C. § 103(a) over Sloane in
view of Swartz and further in view of Official Notice.

3. Claim 33 stands rejected under 35 U.S.C. § 103(a) over Sloane in
view of Swartz and further in view of Sugiyama.

ISSUE
The issue is whether Appellants have sustained their burden of showing that
the Examiner erred in rejecting the claims 26-30, 32, 34-38 on appeal as being
unpatentable under 35 U.S.C. § 103(a) over Sloane in view of Swartz. This issue

1 Although Appellants’ Brief § VI groups claims 26-38 together as one group, it is
clear from the contents of the Final Office Action dated January 10, 2006 that the
Examiner meant to break out claims 31 and 33 as separate rejections given that
claims 31 and 33 are rejected under 35 U.S.C. § 103(a) using additional references.
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turns in part on whether Sloane discloses a portable terminal as claimed and
whether a person with ordinary skill in the art would have known to use the virtual
keyboard of Swartz in the portable terminal of Sloane.

FINDINGS OF FACT
1. The Examiner noted the following correspondence between the claims
and the disclosure in Sloane:

… Sloane teaches a host computer system that stores and
retrieves shopping records of customer and stores and
accesses product information; a portable terminal that can
be used by a plurality of different customers and is in
communication with the host computer; interface through
which a customer using the portable terminal
communicates with the portable terminal at least in part
to identify himself or herself to the portable terminal (see
col. and customer identifier identifying customer based
on data offered to the portable terminal; customer
identifier as part of the terminal; the data including a
customer identification number, scanable by the portable
terminal (see fig. 10-11, col. 3 lines 32-67, col. 9 lines
5-26, col. 5 line 45 to col. 6 line 54 and col. 7 line 48 to
col. 9 line 3). (Final 4) (Ans. 3)

2. The Examiner found that:

…Sloane does not teach an interface comprising a virtual
keyboard, for manually entering the customer ID (as
argued by applicant) [but] it is disclosed in Swartz (see
col. 9 lines 28-35). It would have been obvious to one of
ordinary skill in the art at the time of the invention to
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include a keyboard for entering user ID, in Sloane's
interface, as in Swartz, in order to provide an option for
entering the information through the scanner or through
the keyboard if the barcode could not be read by the
scanner (see col. 12, 41-49). (Final 4) (Ans. 3-4)

3. Sloane discloses a

[p]ortable bar code scanner 20 [which] includes indicator
lights 36a-36c for indicating to the consumer the
occurrence of certain events, such as, for example, ready
to scan, a discount being offered, a product promotion, or
any other message or event that the retailer/manufacturer
feels is necessary to alert the consumer. (Sloane, col. 6,
ll. 40-45.)
4. Sloane discloses a

[r]etailer computer/controller 12 also receives and
stores consumer information through their frequent
shopper card accounts. This information can include
previous shopping history, types of products purchased,
the time when products were purchased and any other
information deemed valuable to the retailer or product
manufacturer for purposes of marketing. Retailer
computer/controller 12 can store all this information
using any suitable known methods of data storage, such
as hard disk storage, optical storage mediums, magnetic
tape storage, etc. (Sloane, col. 7, ll. 27-36.)
5. Sloane discloses that

[t]he portable bar code scanner 20, in conjunction
with retailer computer/controller 12, will maintain a
running total of the purchases made by the user, enable
the user to view their current savings on this shopping
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trip and all of their shopping trips year-to-date, and more
importantly will eliminate waiting on a checkout line to
have the purchases rung up (scanned) by the cashier.
(Sloane, col. 6, ll. 64-67, col. 7, ll. 1-3.)
6. Sloane discloses an identification code that personally identifies the user
in that
…[w]hen a consumer enters the retail establishment, they
can provide required identification by inserting in the
center an identification card or code in order to retrieve
one of the portable bar code scanners 20 and use it during
their shopping experience. For example, in order to
retrieve a scanner 20, the consumer uses an identification
card (not shown) and swipes it through card reader 5.
Card reader 5 can be any suitable known card reader, and
can use magnetic, electronic or optical technology, and
the consumer identification card (not shown) will also be
magnetic, electronic or optical depending on the card
reader format. As an incentive to motivate the consumer
to try this system, the scanner control center 2 will offer
the consumer a promotion related to the use of the
system, which could include entering the consumer in a
sweepstakes contest upon removal of a scanner 20 from
its respective compartment 4a-4t and identification of the
consumer. Card reader 5 can also be a scanner capable
of scanning a consumer's frequent shopper card bar code,
and thereby identify the consumer. (Sloane, col. 5, ll. 33-
51.)
7. Sloane discloses that
…the consumer 13 using his portable bar code scanner
20 to scan the bar code 32 on his frequent shopper card
30 (or as accomplished when the consumer obtains the
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portable scanner 20 from the scanner center 2) before the
consumer starts shopping. The retailer's
computer/controller 12 (FIG. 12) accesses the consumer's
purchase history, and based on instructions from the
computer/controller sends a message to portable bar code
scanner 20 offering the consumer discounts, promotions
or other information based upon his part purchasing
history. In addition, the consumer will also receive
messages indicating the current status of their electronic
frequent shopper account, and any discounts, credits or
awards and promotions that may be available. Thus, the
consumer will know of any electronic credits or
discounts prior to starting their shopping, so as to
possibly influence their present shopping behavior.
(Sloane, col. 9, ll. 5-19.)

8. Swartz discloses a virtual keyboard interface or touch screen 4 as part of a
portable terminal 1 which displays different software menus 18 (Swartz, col. 5, ll.
39-46) which,
…[i]n order to establish a communications channel, a
user keys in or scans a store ID number (FIG. 3,
reference numeral 78.) This is represented by the process
block 152. By selecting the log-in button on the touch
screen, the user transmits the store identifier and the
internal terminal identifier, to the store computer via a
telephone network. This is represented by the process
block 153. The store computer (FIG. 3, reference
numeral 73) receives the transmission, creates a customer
dedicated transaction file and sends the acknowledgment
of the customer's presence, back to the portable
communications terminal. The acknowledgment is
provided by an audible signal and a visual indication on
the touch screen. This step of the log-in process is
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represented by the process block 154. Process Stop 155
signifies that the system has completed the log-in
process. (Swartz col. 9, ll. 33-48.)

9. In Swartz, the portable terminal 1 has two modes of operation. One mode
is where it operates as a telephone and communicates with a telephone network,
and another where the terminal 1 operates as a scanner communicating directly
with the store computer by either prompting one of a phone key 6 or a scan key 5,
respectively (Swartz, col. 5, ll. 19-24; col. 8, ll. 56-66).

PRINCIPLES OF LAW
“Section 103 forbids issuance of a patent when ‘the differences between the
subject matter sought to be patented and the prior art are such that the subject
matter as a whole would have been obvious at the time the invention was made to a
person having ordinary skill in the art to which said subject matter pertains.’” KSR
Int'l Co. v. Teleflex Inc., 127 S.Ct. 1727, 1734 (2007). The question of
obviousness is resolved on the basis of underlying factual determinations including
(1) the scope and content of the prior art, (2) any differences between the claimed
subject matter and the prior art, (3) the level of skill in the art, and (4) where in
evidence, so-called secondary considerations. Graham v. John Deere Co., 383
U.S. 1, 17-18 (1966). See also KSR, 127 S.Ct. at 1734 (“While the sequence of
these questions might be reordered in any particular case, the [Graham] factors
continue to define the inquiry that controls.”)
In KSR, the Supreme Court emphasized “the need for caution in granting a
patent based on the combination of elements found in the prior art,” id. at 1739,
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and discussed circumstances in which a patent might be determined to be obvious.
In particular, the Supreme Court emphasized that “the principles laid down in
Graham reaffirmed the ‘functional approach’ of Hotchkiss, 11 How. 248.” KSR,
127 S.Ct. at 1739 (citing Graham, 383 U.S. at 12 (emphasis added)), and
reaffirmed principles based on its precedent that “[t]he combination of familiar
elements according to known methods is likely to be obvious when it does no more
than yield predictable results.” Id. The Court explained:
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 a different one. If a
person of ordinary skill can implement a predictable
variation, § 103 likely bars its patentability. For the same
reason, if a technique has been used to improve one
device, and a person of ordinary skill in the art would
recognize that it would improve similar devices in the
same way, using the technique is obvious unless its
actual application is beyond his or her skill.
Id. at 1740. The operative question in this “functional approach” is thus “whether
the improvement is more than the predictable use of prior art elements according to
their established functions.” Id.
The Supreme Court stated that there are “[t]hree cases decided after Graham
[that] illustrate the application of this doctrine.” Id. at 1739. “In United States v.
Adams, … [t]he Court recognized that when a patent claims a structure already
known in the prior art that is altered by the mere substitution of one element for
another known in the field, the combination must do more than yield a predictable
result.” Id. at 1739-40. “Sakraida and Anderson’s-Black Rock are illustrative – a
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court must ask whether the improvement is more than the predictable use of prior
art elements according to their established function.” Id. at 1740.
The Supreme Court stated that “[f]ollowing these principles may be more
difficult in other cases than it is here because the claimed subject matter may
involve more than the simple substitution of one known element for another or the
mere application of a known technique to a piece of prior art ready for the
improvement.” Id. The Court explained:
Often, it will be necessary for a court to look to
interrelated teachings of multiple patents; the effects of
demands known to the design community or present in
the marketplace; and the background knowledge
possessed by a person having ordinary skill in the art, all
in order to determine whether there was an apparent
reason to combine the known elements in the fashion
claimed by the patent at issue.
Id. at 1740-41. The Court noted that “[t]o facilitate review, this analysis should be
made explicit.” Id. (citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006)
(“[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”)). However, “the
analysis need not seek out precise teachings directed to the specific subject matter
of the challenged claim, for a court can take account of the inferences and creative
steps that a person of ordinary skill in the art would employ.”
ANALYSIS
For the reasons that follow, we sustain the Examiner’s rejection of
independent claims 26 and 34. Appellants’ arguments likewise fail to demonstrate
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error in the rejection of dependent claims 27-33, 35-38 which Appellants have not
argued separately from claims 26 and 34. See 37 C.F.R. § 41.37(c)(1)(vii)(2007).
Claims 31 and 33 were presented separately in Appellants’ Brief, but Appellants
did not provide a substantive argument as to the separate patentability of these
claims. Therefore, claims 27-33, 35-38 fall with claims 26 and 34.
The rejection of claims 26-38 under 35 U.S.C. § 103(a) over Sloane in view of
Swartz.
Appellants argue
Sloane simply discloses a portable bar code reader, which
the Examiner equates with the claimed portable terminal.
However, it is clear from the disclosure of Sloane that
this reference does not disclose a portable terminal
comprising a virtual keyboard through which a customer
identifies himself or herself to the portable terminal with
a unique customer identifier and is relayed to a host
computer system. (Emphasis omitted) (App. Br. 5)
We are not persuaded by Appellants’ arguments above for two reasons.
First, Appellants are attacking the Sloane reference individually when the rejection
is based on a combination of references. See In re Keller, 642 F.2d 413, 426,
(CCPA 1981); In re Young, 403 F.2d 754, 757-58 (CCPA 1968). It is admitted
that “Sloane does not teach an interface comprising a virtual keyboard...” (FF 2),
thus the argument directed to this deficiency is ineffective. Any lack of a disclosed
keyboard interface in Sloane is provided for by Swartz under the provisions of 35
U.S.C. § 103(a) (Id.), and hence the combination meets the requirements of the
claims. Second, Appellants argue that “Sloane simply discloses a bar code reader”
(App. Br. 5). However, we find that the input device 20 in Sloane is more than a
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just a bar code reader in that it functions much in the same way as Appellants’
portable terminal because it: 1. communicates with a user informing him/her of a
discount being offered, a product promotion, or any other message or event that the
retailer/manufacturer feels is necessary to alert the consumer (FF 3); and
2. maintains a running total of purchases made by the user while further enabling
the user to view their current savings on the present shopping trip and all of the
user’s shopping trips year-to-date. (FF 4)
Appellants next argue that:
“…[1.] Swartz et al. fails to disclose or suggest an
interface through which a customer using the portable
terminal communicates with the portable terminal, at
least in part to identify himself or herself to the portable
terminal. [2.] Also, Swartz et al. does not disclose or
suggest a customer identifier that identifies the customer
... entered by the customer into the portable terminal and
relayed to the host computer system…. [3.] Swartz et al.
fails to disclose or suggest a portable terminal that can be
used by a plurality of different customers. [4.] Similarly,
there is nothing within the four corners of Swartz et al.
that discloses or suggests the portable terminal remains in
the store after termination of a shopping session by the
customer for use by a subsequent customer. [5.] Further,
since communications take place over a telephone
network, external to a retail environment, Swartz et al.
fails to disclose or suggest a portable terminal that is in
communication with the host computer within a retail
environment.
(App. Br. 6)
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Appellants again attack the references individually when the rejection is
based in the combination of both Swartz and Sloane, and thus these arguments fail
because the alleged deficiencies are accounted for by the combination. See Keller
at 426. The Examiner identified Sloane and not Swartz as disclosing the items
identified by Appellants as deficiencies 2-4, supra (FF 1). Appellants do not
challenge Sloane as failing to disclose these items, and thus cannot redirect such
alleged deficiencies to Swartz. However, the alleged deficiencies of Swartz noted
above as items 1 and 5 are specific to Swartz and are addressed as follows.
First, the portable terminal 1 disclosed by Swartz does allow the user to
communicate with it via the interface 4 by keying in an ID number (FF 8). Albeit,
the ID number in Swartz is disclosed as being that of that of the store and not one
of a user to personally identify him or herself. However, the general teaching of
using an interface to communicate an identification code through a portable
terminal is nevertheless taught by Swartz. Use of a personal ID number is already
disclosed by Sloane (FF 6).
Second, the alleged deficiency listed as item 5, supra, stating that in Swartz
“communications take place over a telephone network, external to a retail
environment”, is an argument which is narrower in scope than what is being
claimed (App. Br 6). See, In re Self, 671 F.2d 1344, 1348 (CCPA 1982). The
claims only require that the portable terminal be in communication with the host
computer within the retail environment. As found supra (FF 9), in Swartz the
portable terminal 1 has two modes of operation. One is where it operates as a
telephone and communicates with a telephone network, and another where the
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terminal 1 operates as a scanner communicating directly with the store computer
by either prompting one of a phone key 6 or a scan key 5, respectively (Id.). Since
in the scan mode the portable terminal 1 of Swartz is within the store and is
communicating with the store or host computer, the claim requirements are met.
Appellants argue that claim 34 requires sending a link request to the host
computer via the portable terminal and that neither Sloane nor Swartz discloses
this feature (App. Br. 6). The Examiner takes the position that “Sloane's device is
in communication with the host computer when user scans the frequent shopper
card bar code…” (Ans. 7), and hence Sloane’s device meets the requirements of
claim 34. Appellants however argue that in Sloane “…customers must identify
themselves at a scanner station before a portable bar code scanner is unlocked for
their use (see, e.g., col. 3, lines 5-10).” (App. Br. 6). However a closer reading of
Sloane indicates that the portable device 20 can itself be used to accept the ID code
for the customer and in turn access the store computer 12 (FF 6) which we read as
sending a link request by virtue of the portable device initiating communications
with the store computer. Furthermore, we choose to read that activating the
portable terminal occurs in Sloane only when the store computer accesses the
consumer’s purchase history, which as disclosed in Sloane, occurs only after
successful scanning of the customer ID, e.g., verification (FF 7).
Appellants also argue “there is no motivation or suggestion to combine the
references in the manner suggested.” (App. Br. 7). To the extent Appellants are
looking for an explicit motivation, suggestion, or teaching in the art, this rigid test
has been foreclosed by the Supreme Court’s recent holding in KSR Int’l Co. v.
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Teleflex Inc., 127 S. Ct. 1727 (2007). In KSR, the Court characterized the teaching,
suggestion, motivation test as a “helpful insight” but found that when it is rigidly
applied, it is incompatible with the Court’s precedents. KSR, 127 S. Ct. at 1741.
The holding in KSR makes clear that it is no longer absolutely necessary to find
motivation in the references themselves. See KSR, 127 S. Ct. at 1741.
Appellants argue more specifically that 1. because “…Sloane merely
discloses using a bar code scanner to scan the bar code on a frequent shopper card”
and 2. “…Swartz et al. discloses entering a store number[]’”, the Examiner has
engaged in impermissible “…20/20 hindsight with Appellants' specification as a
roadmap to make the purported combination.” (Appeal Br. 7-8) We are not
persuaded by Appellants’ arguments here because, as discussed above, the input
device 20 in Sloane is more than a just a bar code reader in that it functions much
in the same way as Appellants’ portable terminal (FF 3,4). Second, also as
discussed above, Swartz is relied on only for the general teaching of inputting an
I.D. code into a virtual display (FF 8), and it is Sloane and not Swartz which
discloses using a personal I.D. inputted into the device 20 via an I.D. card (FF 6).
We agree with the Examiner that a person with ordinary skill in the art would infer
from Swartz that its key pad input could be used as a substitute for the I.D. card
swipe method of Sloane since both serve to input machine usable codes into a
system to allow the user to use that system. See KSR at 1741. (In making the
obviousness determination one “can take account of the inferences and creative
steps that a person of ordinary skill in the art would employ”).

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CONCLUSIONS OF LAW
We conclude;
We affirm the rejection of claims 26-30, 32, 34-38 under 35 U.S.C. § 103(a)
over Sloane in view of Swartz.
We affirm the rejection of claim 31 under 35 U.S.C. § 103(a) over Sloane in
view of Swartz and further in view of Official Notice.
We affirm the rejection of claims 33 under 35 U.S.C. § 103(a) over Sloane
in view of Swartz and further in view of Sugiyama.

DECISION
The decision of the Examiner to reject claims 26-38 is AFFIRMED.
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) (2007).
AFFIRMED

JRG

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