Ex Parte Rhoads

Board of Patent Appeals and Interferences

Nov 29, 2007

09804679 (B.P.A.I. Nov. 29, 2007)

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UNITED STATES PATENT AND TRADEMARK OFFICE
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BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
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Ex parte GEOFFREY B. RHOADS
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Appeal 2007-2628
Application 09/804,679
Technology Center 2600
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Decided: November 29, 2007
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Before KENNETH W. HAIRSTON, ROBERT E. NAPPI, and KARL D.
EASTHOM, Administrative Patent Judges.

EASTHOM, Administrative Patent Judge.

DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) from the Final
Rejection of claims 1-9. We have jurisdiction pursuant to 35 U.S.C. § 6(b).
We affirm.
BACKGROUND
The claims are directed to a method of internet distribution of video
including exchanging a fee and watermarking of the video. Watermarking
occurs “on the fly”, which is during transmission. Watermarks on videos are
digital messages that contain a variety of types of information that can
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include any manner of information related to the video or transaction such as
an identifier of the consumer, the date, or an identifier of the internet sites
from which or to which the selected video is provided.
Claims 1-6 are illustrative:

1. A method for internet distribution of video comprising:
displaying to a consumer a listing of video titles;
receiving a signal indicative of a video title selected by the user;
exchanging a fee;
watermarking the video on-the-fly; and
transmitting the video to the consumer.

2. The method of claim 1 in which the watermarking includes
watermarking the video with at least one data from the list comprising: an
identifier of the date, an identifier of an internet site from which the selected
video is provided, an identifier of the consumer, and an identifier of an
internet address to which the selected video is transmitted.

3. The method of claim 2 which includes watermarking the video
with at least two data from said list.

4. The method of claim 2 which includes watermarking the video
with at least three data from said list.

5. The method of claim 2 which includes watermarking the video
with all four data from said list.

6. The method of claim 2 in which the watermarking includes
watermarking with an identifier of the date.

THE REFERENCES

Moskowitz US 5,822,432 Oct. 13, 1998
Kenner US 5,956,716 Sept. 21, 1999
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Fridrich US 6,101,602 Aug. 8, 2000

THE REJECTIONS
Claims 1-2 and 8 stand rejected under 35 U.S.C. § 102(e) as being
anticipated by Kenner.
Claims 3-4, 7, and 9 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Kenner and Moskowitz.
Claims 6 stands rejected under 35 U.S.C. § 103(a) as unpatentable
over Kenner and Fridrich.
Claim 5 stand rejected under 35 U.S.C. § 103(a) as unpatentable over
Kenner and Moskowitz, further in view of Fridrich.

PRINCIPLES OF LAW
Unless the steps of a method actually recite an order, the steps are not
ordinarily construed to require one. See Loral Fairchild Corp. v. Sony
Corp. 181 F.3d 1313, 1322, 50 USPQ2d 1865, 1870 (Fed. Cir. 1999)
(stating that “not every process claim is limited to the performance of
its steps in the order written”). However, such a result can ensue
when the method steps implicitly require that they be performed in the
order written. See Loral, 181 F.3d at 1322, 50 USPQ2d at 1870
(stating that “the language of the claim, the specification and the
prosecution history support a limiting construction[, in which the steps
must be performed in the order written,] in this case”); Mantech, 152
F.3d at 1376, 47 USPQ2d at 1739 (holding that “the sequential nature
of the claim steps is apparent from the plain meaning of the claim
language and nothing in the written description suggests otherwise”).
In this case, nothing in the claim or the specification directly or
implicitly requires such a narrow construction

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Interactive Gift Express Inc. v. Compuserve Inc., 256 F.3d 1323, 1342-1343
(Fed. Cir. 1991)(holding no order in method steps required). See also Altris,
Inc. v. Symantec Corp., 318 F.3d 1363, 1369 (2003)(citing Interactive Gift,
reversing trial court, and holding steps not required to be in order written if
they can be logically performed in another order).

We have cautioned against reading limitations into a claim from the
preferred embodiment described in the specification, even if it is the
only embodiment described, absent clear disclaimer in the
specification. See Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d
898, 906 (Fed.Cir.2004) ( “Even when the specification describes only
a single embodiment, the claims of the patent will not be read
restrictively unless the patentee has demonstrated a clear intention to
limit the claim scope using ‘words or expressions of manifest
exclusion or restriction.’ ”); Teleflex, Inc. v. Ficosa N. Am. Corp., 299
F.3d 1313, 1325 (Fed.Cir.2002).

In re American Academy of Science Tech Center, 367 F.3d 1359, 1370 (Fed.
Cir. 2004).
The Examiner bears the initial burden of presenting a prima facie case
of obviousness. In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992). If that
burden is met, then the burden shifts to the Appellants to overcome the
prima facie case with argument and/or evidence. See Id.
The Examiner’s articulated reasoning in the rejection must possess a
rational underpinning to support the legal conclusion of obviousness. In re
Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006).
“[W]hen 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
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field, the combination must do more than yield a predictable result.” KSR
Int’l Co. v. Teleflex Inc., 127 S.Ct. 1727, 1740 (2007).
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.
Sakraida and Anderson’s-Black Rock are illustrative – a court must
ask whether the improvement is more than the predictable use of prior
art elements according to their established functions.

Id. at 1740 .

DISCUSSION
Claims 1-2 and 8
The limitation at dispute in claim 1 is "exchanging a fee." Appellant
argues that the step of “exchanging a fee” requires a payment that must
occur before transmitting the video (App. Br. 7). Appellant argues: “Rather
than permitting charges to accrue, and checking that a cost limit is not
exceeded, applicant’s claimed methods call for actually ‘exchanging a fee’
before transmitting the video to the consumer … No accrual and later billing
– as taught by Kenner – is involved” (App. Br. 7).
The Examiner is correct that the method steps do not require “that the
payment for a video title be in advance of its delivery.” (Answer 8).
Nothing in the claim implicitly or explicitly requires that the fee must be
exchanged before the video is transmitted. “Unless the steps of a method
actually recite an order, the steps are not ordinarily construed to require
one…In this case, nothing in the claim or the specification directly or
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implicitly requires such a narrow construction.” Interactive Gift at 1342-
1343 (citations and quotations omitted). Logically, the video could be
transmitted before the fee is exchanged. Id. at 1343 (“Logically,
information could be sent after the request is made.”)
Turning to the Specification, we also find that the Specification
indicates that the claims do not require such an order, contrary to
Appellant’s argument (App. Br. 7). The Specification states:
On receipt of the token data, the website immediately routes the token
data to the identified bank, together with an identifier of the media
provider or account to which the funds represented thereby are to be
credited … If the numbers are valid, the bank updates its disk-based
records to indicate the three tokens have been spent and that the bank
now owes the media supplier 30 cents, which it may either pay
immediately (e.g. by crediting to an account identified by the media
provider) or as one lump sum at the end of the month. The bank then
sends a message to the web site confirming that the tokens were valid
and credited to the requested account.
In response, the web site begins delivery of the requested video
to the consumer.

(App. Br. 5; Specification 4:8-19 )(emphasis supplied).

The token-based payment method is but one of many that can
be employed; the literature relating to on-line payment mechanisms is
extensive, and all such systems can generally be employed.

(Specification 5:26-28)(emphasis supplied).

The Specification discloses several embodiments, one of which
indicates paying a lump sum at the end of the month, which is logically after
a video transmission. Further, unlike the Specification, the claim fails to
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recite limiting language pertaining to delivery of the video in response to a
payment or token credit. Still further, as acknowledged by Appellant, “all
[prior art] systems can generally be employed.” Consequently, we decline to
limit the claims to any particular embodiment in the specification. American
Academy, 367 F.3d at 1369 (“We have cautioned against reading limitations
into a claim from the preferred embodiment described in the specification,
even if it is the only embodiment described, absent clear disclaimer in the
specification.”)(citations omitted).
We also find that even if a specific order in the method steps were
required, Kenner would anticipate the claim. Kenner states:
This account may be in the form of a subscription, a debit account, or
any of numerous other known payment arrangements. When the user
accesses subscribed-to content through the system, the account can be
updated. In this manner, the user can be billed for usage in any
manner desired, subscription information can be tracked and
preserved, authorization levels can be set, and data protection to
prevent unauthorized use can be prevented.

(Col. 6, ll. 19-25)(emphasis supplied).
We find that access[ing] subscribed-to content with account [update]
necessarily occurs prior to transmittal of the video to the consumer; and
because Kenner discloses any of numerous or other known payment
arrangements, we further find that the argued claimed order of fee exchange
prior to video transmittal to the consumer is met. For further support of this
interpretation, we note that Kenner discloses that if the consumer lacks a
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valid subscription or exceeds a charge limit, the video download will be
prevented (col. 24, ll. 50-63)1.
Appellant also argues that an “accrual” as disclosed in Kenner is not
the same as a “payment” required by claim 1 (App. Br. 8) because
interpreting “exchange of a fee” as an accrual is too expansive (Reply Br.
2)(citing Phillips v. AWH, 415 F.3d 1303 (Fed. Cir. 2005)). The Examiner
argues to the contrary stating that agreement of a financial exchange, such as
a charge accrual or update as disclosed by Kenner, is a fee exchange
(Answer 8).
After careful consideration of the arguments, we find the Examiner’s
interpretation and reasoning to be the better of the two. The Examiner’s
interpretation is consistent with the rationale of Phillips, because the
Examiner’s interpreted meaning of “exchanging a fee” is consistent with
Appellant’s Specification. As noted above, Appellant discloses several
methods of fee exchange: payment can be “immediately (e.g. by crediting to
an account identified by the media provider), or as one lump sum at the end
of the month” (Specification 4:14-16)(emphasis supplied); or “all [prior art]
systems can generally be employed”, (Specification 5:26-28)(emphasis
supplied). The latter method necessarily includes the prior art systems of
Kenner. Consequently, we further find that even if “exchanging a fee”
requires “paying”, the specification does not distinguish paying from
“crediting an account”. Cf. American Academy, 367 F.3d at 1369 (the

1 Compare this teaching in Kenner with the exchange of fees described by
the Examiner (Answer 8).
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specification does not limit the claim merely because a term is used in a
preferred embodiment).
Moreover, because Kenner discloses payment by any known payment
arrangements (col. 6, ll. 19-26), even if “exchanging a fee” requires that
funds be transferred before the video transmittal, the claim would be met.
Appellant has not argued that he invented the method of paying before
products are delivered, or that that method is unknown. Consequently, for
the reasons noted above, we find that within the metes and bounds of Kenner
is the disclosure of the method of exchanging a fee before or after a video is
transmitted.
The rejection of claim 1 is sustained. The rejection of claims 2 and 8
is not separately argued and, thus, these claims fall together with claim 1 on
which they depend. The rejection of claims 2 and 8 is sustained.

Claims 3-4, 7, and 9
The limitation in dispute in claim 3 is “watermarking the video with at
least two data from said list,” while the limitation in dispute in claim 4 is
watermarking the video with at least three data from said list.” The
Examiner and Appellant agree that watermarking with “an identifier of the
consumer” is disclosed in Kenner. That is, Kenner discloses that “data
derived from the user’s ID will be added to the video data … thereby
watermarking the file” (col. 25, ll. 64-67; Answer 4; App. Br. 9).
Thus, the dispute is whether an additional one (Claim 3) or two
(Claim 4) of the three following data are suggested by Kenner with
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Moskowitz, an identifier of an internet site from which the selected video is
provided (Claim 7), and an identifier of an internet address to which the
selected video is transmitted (Claim 9) (App. Br. 9, 11).
We agree with the relevant factual findings by the Examiner to
support the rejection which are summarized as follows: Kenner discloses
watermarking the video with “data derived from the user’s ID”
(col. 25, ll. 64-67; Answer 4). Kenner discloses “address[ing] the desired
video clip with the Internet address of the user’s local [storage unit] (col. 25,
ll. 23-26; Answer 5). Moskowitz discloses watermarking can include
various fields of data including “authorized purchaser identification,” “seller
account identification,” “payment means identification,” “digitally signed
information from [a] sender indicating percent of content transferred,” and
“digitally signed information from [a] receiver indicating percent of content
transferred” (col. 9, ll. 1-16). Moskowitz also discloses watermarking with
“information on where to locate other copies of this content, or similar
content” ( col. 9, ll. 31-32). Moskowitz also discloses that “a watermark
might contain one or more URLs2 describing online sites where similar
content that the buyer of a piece of content might be interested in can be
found” (col. 9, ll. 36-39). (See Answer 4-7).
We also note that Moskowitz discloses watermarking to protect
digitized copyrightable multimedia works, such as musical recordings,

2 We interpret “URL” to be an identifier of an internet site which is in
accordance with the Examiner’s and Appellant’s interpretation (see Answer
4).
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movies and videos games (col. 1, ll. 6-12). “The watermarks can also serve
to allow for secured metering and support of other distribution systems of
given media content and relevant information associated with them,
including addresses, protocols, billing, pricing or distribution path
parameters, among the many things that could constitute a watermark.”
(Moskowitz, col. 1, ll. 15-21).
Further, Moskowitz discloses that the prior art shortcomings include
the following:
No provisions are made for stamping given audio signals or other
digital signals with “purchaser” or publisher information to stamp the
individual piece of content in a manner similar to the sales of physical
media products (CDs, CD-ROMs, etc.) or other products in general
(pizza delivery, direct mail purchases, etc.) In other words, “interval-
defining signals,” as described in the Greenberg patent, are important
for verification of broadcasts of a time-based commodity like a time
and date-specific, reserved broadcast time, but have little use for
individuals trying to specify distribution paths, pricing, or protect
copyrights relating to given content which may be used repeatedly by
consumers for many years. It would also lack any provisions for the
serialization and identification of individual copies of media content
as it can be distributed or exchanged on the Internet or in other on-line
systems.

(Moskowitz, col. 10, ll. 4-20).

Similar to the reason for watermarking disclosed above by Moskowitz - the
protection of copyrights - Kenner discloses that “watermarking enables
authorities to track down copyright violators” (col. 26, ll. 10-11).
Appellant argues that because the specific information of the Internet
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site from and to which the video is transmitted is not specifically mentioned
as part of the watermark, the Examiner has not made a prima facie case of
obviousness (App. Br. 9-10). We disagree, and find support for the
Examiner’s articulated reasons, as recited above, to employ the claimed
internet site data in a watermark. The main factors supporting the reasoning
are that the prior art discloses employing: internet sites for video
transmission; watermarks containing a myriad of information such as
addresses, protocols, and distribution path parameters to identify the
purchasers, sellers, and media content; and URL sites as a type of data to
include in a watermark in order to identify where to obtain videos of the
same or similar content. The prior art also suggests stamping transmitted
video content to help to identify specific distribution paths, similar to sales
of physical media, and to help keep track of the particular transaction for
both billing and for copyright protection. At a minimum, keeping track of
the distribution path data for copyright or billing purposes suggests keeping
track of the starting and end points of that distribution path which in this
prior art of record are the websites of the purchasers and sellers. Employing
helpful identifying transactional data in a watermark would have been
obvious given the desire “to stamp the individual content in a manner similar
to the sales of physical media.” (Moskowitz, col. 10, lines 4-10).
Consequently, we find that the Examiner’s articulated reasons shifted
the burden to Appellant to show that he did more than combine known prior
art data resulting in more than a predictable result of enhanced copyright
protection, product tracking, or billing, which he has failed to do. KSR , 127
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S.Ct. at 1739 (“The combination of familiar elements according to known
methods is likely to be obvious when it does no more than yield predictable
results.”). Accordingly, we sustain the obviousness rejection of claims 3-4,
7 and 9.
Claims 5-6
The limitation at dispute in claim 5 is “watermarking the video with
all four data from said list,” and for claim 6 is “watermarking with an
identifier of the date.” Appellant argues that Fridrich employs date data in a
watermark for a different purpose than that asserted by the Examiner (App.
Br. 12-13), or as required by claim 6 (Reply Br. 5).
Appellant’s arguments (App. Br. 12, Reply Br. 5) imply claims 5-6
require a “date of purchase.” We disagree. We agree with the Examiner’s
articulated reason of identifying a date for use with other data to track down
copyright violators (Answer 7, Final Rejection 6)3. Appellant acknowledges
that the reason for a date watermark employed by Fridrich is to help the
recipient confirm or rebut the authenticity of the content (App. Br. 12). We
find this to be virtually the same reason as that argued by the Examiner
(Answer 7), as Fridrich discloses that ensuring authenticity includes
protecting property rights such as copyright (col. 1, ll. 30-40). This similar
authenticity or copyright reason is also articulated by Kenner and
Moskowitz. See Kenner (“watermarking enables authorities to track down
copyright violators” ) (col. 26, ll. 10-11); Moskowitz (identifying a date of a

3 We also note that Kenner at column 22, lines 6-10 discloses a log for time
and date information in order to keep track of billing information.
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notarization may help to authenticate the video content for copyright
purposes; also disclosing “time stamps” in the prior art and expressing a
desire “to stamp the individual content in a manner similar to the sales of
physical media” to specify distribution paths, and for pricing, and
serialization purposes, and to protect copyrights )(col. 9, l. 40 to col. 10, l.
24).
We find the Examiner’s articulated reasoning in the rejection
possesses a rational underpinning to support the legal conclusion of
obviousness. See In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006). We also
find that the Examiner has met the burden of presenting a prima facie case,
which burden the Appellant has failed to overcome with argument and/or
evidence. See In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992).
As “a court must ask whether the improvement is more than the
predictable use of prior art elements according to their established
functions,” KSR Int’l Co. v. Teleflex Inc., 127 S.Ct. 1727, 40 (2007), we
find that Appellant has not shown that there is more than a predictable result
flowing from the addition of time and internet site data to watermarks on
transmitted videos, where watermarks with similar data on transmitted
videos are well known; the predictable result being the existence of more
information with which to track more closely an internet transaction for a
myriad of articulated desirable prior art reasons, such as copyright protection
or other business related reasons such as distribution tracking and pricing.
Accordingly, the rejection of claims 5-6 is sustained.

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STATEMENT OF CONCERN
Finally, we note that the data involved in claims 2-9 may constitute
non-functional descriptive material, because the data does not alter how the
process is performed. “Nonfunctional descriptive material cannot render
nonobvious an invention that would have otherwise been obvious.” In re
Ngai, 367 F.3d 1336, 1339, (Fed. Cir. 2004). Cf. In re Gulack, 703 F.2d
1381, 1385 (Fed. Cir. 1983) (when descriptive material is not functionally
related to the substrate, the descriptive material will not distinguish the
invention from the prior art in terms of patentability).” Ex parte Curry, 84
USPQ2d 1272, 1274 (BPAI 2005)((Informative Opinion) (Affirmed, Rule
36, Fed. Cir., slip op. 06-1003, June 2006)(“We find that the “wellness-
related” data in the databases and communicated on the distributed network
does not functionally change either the data storage system or
communication system used in the method of claim 81”)). However, since
the issue was not argued, we address it no further.

CONCLUSION
The rejections of claims 1-9 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) (2006).

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AFFIRMED

eld

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