Ex Parte Pullman

Patent Trial and Appeal Board

Mar 24, 2015

10159344 (P.T.A.B. Mar. 24, 2015)

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.
10/159,344 05/31/2002 David Pullman 359.1001 8557
23280 7590 03/24/2015
Davidson, Davidson & Kappel, LLC
485 7th Avenue
14th Floor
New York, NY 10018
EXAMINER
MEINECKE DIAZ, SUSANNA M
ART UNIT PAPER NUMBER
3683
MAIL DATE DELIVERY MODE
03/24/2015 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 PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte DAVID PULLMAN
____________________

Appeal 2012-003243
Application 10/159,344
Technology Center 3600
____________________

Before: HUBERT C. LORIN, ANTON W. FETTING, and
JOSEPH A. FISCHETTI, Administrative Patent Judges.

FISCHETTI, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
1

Appellant seeks our review under 35 U.S.C. § 134 from the
Examiner’s final rejection of claims 1–20. A hearing was held June 6, 2013.
We affirm.

1
The Appellants indicate the inventor, David Pullman, is the real party in
interest. (App. Br. 2).
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2

THE CLAIMED INVENTION
Appellant claims a methods and devices for valuing and securitizing
intellectual property assets. Spec. para. 1. Claim 1 is illustrative of the
claimed subject matter:
1. A method for creating a pool of intellectual property assets
for securitization comprising the steps of:
identifying rights to each of a plurality of intellectual
property assets including a first intellectual property asset and a
second intellectual property asset, the rights including first
rights corresponding to a first revenue stream and second rights
corresponding to a second revenue stream;
identifying revenues in the first revenue stream
associated with the first intellectual property asset so as to
define first asset first revenues, and revenues in the second
revenue stream associated with the first intellectual property
asset so as to define first asset second revenues;
identifying revenues in the first revenue stream
associated with the second intellectual property asset so as to
define second asset first revenues, and revenues in the second
revenue stream associated with the second intellectual property
asset so as to define second asset second revenues;
selecting, using a processor, at least the first intellectual
property asset and the second intellectual property asset from
the plurality of the intellectual property assets to form using a
calculation in the processor, a pool of intellectual property
assets to be securitized, the pool having a first pool revenue
stream including the first asset first revenues and the second
asset first revenues and a second pool revenue stream including
the first asset second revenues and the second asset second
revenues, the first and second assets being selected so as to
approach a desired ratio between the first pool revenue stream
and the second pool revenue stream.

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REFERENCES
The prior art relied upon by the Examiner in rejecting the claims on
appeal is:
Eisbruck, Jay H., “Moody's Approach to Rating Music Royalty and
Intellectual Property-Backed Transactions: There's No Business Like Show
Business,” Special Report, Moody’s Investors Service, July 2, 1999.
Keough, Timothy, WO 02/37367 A1, published May 10, 2002.
Official Notice.

REJECTIONS
2

The following rejections are before us for review.
The Examiner rejected claims 1–9, 11–17, 19, and 20 under
35 U.S.C. § 103(a) as unpatentable over Eisbruck and Keough.
The Examiner rejected claim 10 under 35 U.S.C. § 103(a) as
unpatentable over Eisbruck, Keough, and Official Notice that it was old and
well-known in the art of portfolio management to create a portfolio of assets
wherein the number of selected assets is between 20 and 500.
The Examiner rejected claim 18 under 35 U.S.C. § 103(a) as
unpatentable over Eisbruck, Keough, and Official Notice that it was old and

2
Should there be further prosecution of this application, the Examiner may
wish to consider reviewing the claims for compliance under 35 U.S.C. § 101
in light of the most recent Office guidance on § 101 found in “2014 Interim
Guidance on Patent Subject Matter Eligibility,” 79 Fed. Reg. 74618 (Dec.
16, 2014), which supplements the “Preliminary Examination Instructions in
view of the Supreme Court Decision in Alice Corporation Pty. Ltd. v. CLS
Bank International, et al.,” Memorandum to the Examining Corps, June 25,
2014.
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well-known in the art of investment for common long-term investment
growth rates to lie between 0% and 20%.

FINDINGS OF FACT
We find the following facts by a preponderance of the evidence.
1. Eisbruck discloses securitization of music assets with asset-backed
securities backed by music royalty payment revenues. (Page 2).
2. Eisbruck discloses multiple types of music royalties, such as record
sales/master royalties, publishing royalties, “mechanical” royalties,
performance/broadcast revenues, and synchronization revenues.
(Pages 3 to 6).
3. Eisbruck discloses analyzing future revenues by types of rights as well
as particular assets. (Page 6–7).
4. Eisbruck discloses consideration of multiple types of revenue streams,
stating:
For publishing royalties it is important to separate the
information into the different components of revenue (i.e.
mechanicals. performance. sync use). Each of these sources is
influenced by different factors, so it is important to see the
trends in each and the share of the total they comprise. For
example, performance revenues tend to be more stable, while
sync revenues might be driven by a one-time event like a
commercial which may not be repeatable.
(Page 7).
5. Keough discloses specifying different types of assets in a portfolio
based on revenue stream categories, stating:
Asset allocations may also be set as relative percentages (10%
of the amount of asset type1 that can be bought should be
bought as 50% asset type2). The allocations may also be set
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recursively (50% securitized loan (where 50% is domestic and
50% is international), 50% revenue stream (where 50% is
international, tax-based, 25% is entertainment-based and 25% is
(50% health insurance and 50% malpractice insurance))).
(Page 18).
ANALYSIS
Claims 1–3, 5, and 7–9, and 11
The rejection is affirmed as to claim 1. Appellant does not provide a
substantive argument as to the separate patentability of claims 2, 3, 5, 7–9,
and 11 that depend from claim 1, which is the sole independent claim among
those claims. Therefore, we address only claim 1; claims 2, 3, 5, 7–9, and
11 fall with claim 1. See, 37 C.F.R. § 41.37(c)(1)(vii).
The Appellant argues Keough does not disclose the “selecting”
limitation of claim 1, because Keough instead discloses “taking a lot of
different revenues streams from different assets categories 1 to 13 and
combining them whole in different combinations to form a portfolio with a
specific ratio.” (App. Br. 8–9). In addition, the Appellant argues Eisbruck
never teaches the claim language, because instead Eisbruck discloses
“amalgamating similar homogeneous assets, i.e. one artist and/or songwriter,
not a pool of diversified music, entertainment and other intellectual property
assets as claimed.” (Reply Br. 4).
We are not persuaded by the Appellant’s arguments, which argue
alleged shortcomings in individual references, when the rejection is based on
a combination of references. Specifically, the obviousness rejection of
claim 1 is based on the Eisbruck disclosure of creating securitized assets
backed by music revenue streams (FF 1), where each asset may have any of
several types of revenue streams (FF 2), where future revenues are analyzed
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by revenue type (FF 3), and where it is disclosed that the securitization
involves separating the “information into the different components of
revenue (i.e. mechanicals, performance, sync use)” (FF 4). (Ans. 5–6).
Eisbruck discloses considering different revenue streams and “the share of
the total they comprise.” (FF 4). Furthermore, we are unpersuaded by
Appellant’s argument that Eisbruck’s “amalgamating similar homogeneous
assets, i.e. one artist and/or songwriter” does not meet “a pool of diversified
music, entertainment and other intellectual property assets as claimed”
because it is our understanding that it is possible for a single artist to
endeavor into various types of music and medium, e.g., R&B and pop songs
on CDs and video. Notwithstanding, claim 1 does not require “a pool of
diversified music, entertainment and other intellectual property assets”, and
thus Appellant’s argument fails from the outset because it is not based on
limitations appearing in the claims. In re Self, 671 F.2d 1344, 1348 (CCPA
1982).
In addition, Keough discloses asset selection considering allocations
of revenues based on different rules, encompassing a percentage of revenue
from different revenue types (FF 5). (Ans. 8–9). We agree with the
Examiner that using the revenue-type-based desired ratio of Keough, in
combination with the asset-based securities on music revenue streams in
Eisbruck, would have been obvious to one of ordinary skill in the art. It is a
small leap from the revenue percentage example in Keough to the claimed
method, because the ordinary artisan would recognize a share of the total
revenue each type of revenue type represents (FF 4) and the revenue
percentages disclosed in Keough (FF 5) would make sense to use as a basis
for selecting assets to combine in a pool, so that the “share” and percentages
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achieve the desired results for the asset pool in terms of revenue
expectations. See KSR Int'l. Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)
(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.”)
Claims 4 and 6
Dependent claim 4 recites “wherein the first revenue stream consists
of revenues from one of publishing royalties, mechanical royalties,
performance royalties and synchronization royalties, and the second revenue
stream consists of revenues from another of the publishing royalties,
mechanical royalties, performance royalties and synchronization royalties.”
Dependent claim 6 recites “wherein the first revenue stream consists of
revenues from one of publisher's royalties, writer's share royalties,
co-publisher's royalties, record royalties and producer royalties, and the
second revenue stream consists of revenue from another of the publisher's
royalties, writer's share royalties, co-publisher's royalties, record royalties
and producer royalties.”
The Appellant argues “Keough does not want or desire to form
individual revenue streams from a single asset . . . .” (App. Br. 9–10). We
are not persuaded, because Eisbruck discloses at least “one of” the claimed
types of revenues. (FF 2).
The Appellant also argues Eisbruck “does not disclose any pool with
first revenue stream with revenues from one asset in one category and a
second revenue stream from the same asset in another category.” (Reply
Br. 5). We are not persuaded by the Appellant’s argument, because
Eisbruck discloses each asset may have multiple revenue types. (FF 2).
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Claim 12
Dependent claim 12 recites “wherein the first revenue stream and
second revenue stream consist of future projected revenues.”
The Appellant argues “Keough does not discuss future projected
revenues.” (App. Br. 10). We are not persuaded by the Appellant’s
argument, because Eisbruck discloses consideration of future projected
revenues. (FF 3).
Claims 13–17
3

The rejection is affirmed as to claim 13. Appellant does not provide a
substantive argument as to the separate patentability of claims 14–17 that
depend from claim 13, which is the sole independent claim among those
claims. Therefore, we address only claim 13; claims 14–17 fall with
claim 13. See, 37 C.F.R. § 41.37(c)(1)(vii).
The Appellant argues “[t]here simply is no future royalty stream ratio
being a function of two future royalty streams of one asset” in either
reference. (App. Br. 10–11). We are not persuaded by this argument, for
the same reasons set forth above at claim 1.
The Appellant also argues the combination does not disclose both a
desired pool ratio and “a future royalty stream ratio for each of the plurality
of intellectual property assets,” as claimed. (Reply Br. 5). We are not
persuaded by the argument, because Eisbruck discloses considering all

3
Though the Appellant denotes claims 15 and 17 as being argued separately,
the arguments merely state the claim text and assert that neither reference
discloses the claim language. (App. Br. 11–12). The mere existence of
differences between the prior art and the claim does not establish
nonobviousness. Dann v. Johnston, 425 U.S. 219, 230 (1976).
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revenue types for each asset (FF 3), and Keough discloses what we infer to
be a desired pool ratio (FF 5).
Claim 19
The Appellant argues neither reference “discloses creating a pool as
claimed with past royalty data divided into two streams from each asset, and
then doing the projection.” (App. Br. 12). We are not persuaded by the
Appellant’s argument, because Eisbruck discloses creating asset pools
(FF 1) and multiple revenue streams for each asset (FF 4), and Keough
discloses a desired ratio of revenue streams (FF 5).
Claim 20
The Appellant argues the “ratio i[n] Keough is not BETWEEN a sum
of the IP royalty streams, but rather lumps the IP royalty streams together in
an entertainment group or licensing/branding royalties group.” (App. Br.
13). The argument attacks a single reference when the rejection is based on
a combination of references. We are unpersuaded by the argument for the
same reasons we set forth above at claim 1.
Claim 10
Dependent claim 10 recites “wherein the number of selected
intellectual property assets is between 20 and 500.” The Examiner finds in
Official Notice “it was old and well-known in the art of portfolio
management to create a portfolio of assets wherein the number of selected
assets is between 20 and 500.” (Ans. 16).
The Appellant argues the “Keough disclosure would seem to indicate
thousands of assets, and it is respectfully submitted that the limitation of 20
to 500 would not have been obvious. The Office Action reasoning also
appears based on hindsight and the applicant's own specification, and not a
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teaching in the prior art.” (App. Br. 13–14). We are not persuaded by the
Appellant’s argument, because the rejection relies on the undisputed Official
Notice, not on Keough.
The Appellant also argues impermissible hindsight and that the
motivation to combine is not found in the prior art. (Id.). To the extent
Appellants seek an explicit suggestion or motivation in the reference itself,
this is no longer the law in view of the Supreme Court’s recent holding in
KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 419 (2007). In addition, the
Federal Circuit has stated that “rejections 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.” In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006),
cited with approval in KSR, 550 U.S. at 418. The Examiner, however,
articulates reasoning with a rational underpinning, by stating a motivation
for the combination in claim 10 as being “in order to facilitate creation of
more diversified portfolios, thereby yielding portfolios of more manageable
levels of risk.” (Ans. 16–17).
Claim 18
Separately rejected claim 18 is not argued with specificity, but only by
being grouped with claim 10. (App. Br. 13–14). We affirm the rejection of
claim 18 for the same reasons set forth above at claims 1 and 10, because the
Examiner articulates a motivation for the combination as being “in order to
promote investments in assets that will yield returns that are appealing in
light of inflation rates.” (Ans. 17).

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CONCLUSIONS OF LAW
The Examiner did not err in rejecting claims 1–20 under 35 U.S.C.
§ 103(a).

DECISION
For the above reasons, the Examiner’s rejections of claims 1–20 are
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)(1)(iv).

AFFIRMED
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