09956372 (B.P.A.I. Jun. 19, 2009)

Ex Parte Roberts et al

Board of Patent Appeals and InterferencesJun 19, 2009

09956372 (B.P.A.I. Jun. 19, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE BOARD OF PATENT APPEALS AND INTERFERENCES ____________ Ex parte NEAL ROBERTS, MICHAEL FRANKLIN, CHARLES RUNNELS, and JAMES ANDREWS ____________ Appeal 2009-004444 Application 09/956,372 Technology Center 3600 ____________ Decided:1 June 19, 2009 ____________ Before MURRIEL E. CRAWFORD, HUBERT C. LORIN, and JOSEPH A. FISCHETTI, Administrative Patent Judges. LORIN, Administrative Patent Judge. DECISION ON APPEAL 1 The two-month time period for filing an appeal or commencing a civil action, as recited in 37 C.F.R. § 1.304, begins to run from the decided date shown on this page of the decision. The time period does not run from the Mail Date (paper delivery) or Notification Date (electronic delivery). Appeal 2009-004444 Application 09/956,372 2 STATEMENT OF THE CASE Neal Roberts, et al. (Appellants) seek our review under 35 U.S.C. § 134 of the final rejection of claim 42. We have jurisdiction under 35 U.S.C. § 6(b) (2002). SUMMARY OF DECISION We AFFIRM.2 THE INVENTION The invention relates to a method for performing tax-deferred real estate transactions. Claim 42 is reproduced below. 42. A method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising: creating a real estate portfolio from at least one real property; subjecting the real property in the real estate portfolio to a master agreement; creating a plurality of deedshares by dividing title in the real estate portfolio into a plurality of tenant-in-common deeds, each of the plurality of deedshares subject to a provision in the master agreement for later reaggregating the plurality of tenant-in-common deeds; and issuing the plurality of deedshares to a plurality of holders, at least one of the holders receiving deedshares in exchange for relinquishing title to a real property not in the real estate portfolio; 2 Our decision will make reference to the Appellants’ Appeal Brief (“App. Br.,” filed May 1, 2008) and Reply Brief (“Reply Br.,” filed Sep. 24, 2008), and the Examiner’s Answer (“Answer,” mailed Jul. 24, 2008). Appeal 2009-004444 Application 09/956,372 3 wherein the master agreement does not establish a partnership among the plurality of holders and wherein said exchange by said at least one of the holders is a tax-deferred exchange under IRC § 1031. THE REJECTION The following rejections are before us for review: 1. Claim 42 is rejected under 35 U.S.C. § 101 as being directed to non- statutory subject matter. 2. Claim 42 is rejected under 35 U.S.C. § 112, second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which applicants regard as the invention. ISSUES Is claim 42 directed to statutory subject matter? Is claim 42 indefinite for citing to IRC § 1031 which, according to the Examiner, is “subject to change” (Ans. 5)? FINDINGS OF FACT We find that the following enumerated findings of fact (FF) are supported by at least a preponderance of the evidence. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988) (explaining the general evidentiary standard for proceedings before the Office). 1. Claim 42 recites a method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising creating a real estate portfolio, subjecting real property in the real estate portfolio to a master agreement, and issuing a plurality of Appeal 2009-004444 Application 09/956,372 4 deedshares to a plurality of holders steps. 2. Claim 42 recites neither an apparatus nor transformation of an article. PRINCIPLES OF LAW Statutory Subject Matter (Process) “[T]he proper inquiry under § 101 is not whether the process claim recites sufficient "physical steps," but rather whether the claim meets the machine-or-transformation test. As a result, even a claim that recites "physical steps" but neither recites a particular machine or apparatus, nor transforms any article into a different state or thing, is not drawn to patent- eligible subject matter. Conversely, a claim that purportedly lacks any "physical steps" but is still tied to a machine or achieves an eligible transformation passes muster under § 101.” In re Bilski, 545 F.3d 943, 961 (Fed. Cir. 2008) (en banc) footnote omitted). Definiteness The test for compliance is whether the claims set out and circumscribe a particular area with a reasonable degree of precision and particularity when read in light of the application disclosure as they would be interpreted by one of ordinary skill in the art. In re Moore, 439 F.2d 1232, 1235 (CCPA 1971). ANALYSIS Statutory Subject Matter (Process) The issue is whether the process as claimed is patent eligible under 35 U.S.C. § 101. Claim 42 recites a method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising Appeal 2009-004444 Application 09/956,372 5 creating a real estate portfolio, subjecting real property in the real estate portfolio to a master agreement, and issuing a plurality of deedshares to a plurality of holders steps. FF 1. The recited method comprises steps and is thus nominally drawn to a process. However, for a claimed process to be patent eligible, it must meet the machine-or-transformation test (see Bilski). Here, the claimed method is not tied to a machine nor does it transform a particular article into a different state or thing. Claim 42 does not recite a machine or apparatus. The method of claim 42 also does not transform a particular article into a different state or thing. Claim 42 does not transform any other particular article. Accordingly, we agree with the Examiner that claim 42 fails to comply with 35 U.S.C. § 101 because it is drawn to nonpatentable subject matter. Definiteness We agree with the Appellants. The Examiner argues that the inclusion of IRC § 1031 in the claim renders the claim indefinite because it is subject to change. The determination whether a claim is invalid as indefinite “depends on whether those skilled in the art would understand the scope of the claim when the claim is read in light of the specification.” North Am. Vaccine, Inc. v. American Cyanamid Co., 7 F.3d 1571, 1579 (Fed. Cir. 1993); see Miles Lab., Inc. v. Shandon, Inc., 997 F.2d 870, 875 (Fed. Cir. 1993). That determination is made as of the time of filing. See Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1385 (Fed. Cir. 1986) (analyzing definiteness as of the time of filing). Appeal 2009-004444 Application 09/956,372 6 The Examiner has not argued that one of ordinary skill would not understand the scope of the claim when the claim is read in light of the specification as of the time of filing. Rather, the Examiner argues, in essence, that the claim might become indefinite in the future if the wording of IRC § 1031 changes, which is probable according to the Examiner. We decline to find a claim indefinite based on speculation. Moreover, definiteness is determined as of the time of filing, not on what might happen in the future. Cf. Howmedica Osteonics Corp. v. Tranquil Prospects Ltd., 401 F.3d 1367 (Fed. Cir. 2005) (“Thus, these references do not directly address the definiteness requirement — an assessment relevant to the time of filing, not a later reexamination proceeding.”) See also Kopykake Enters. v. Lucks Co., 264 F.3d 1377, 1383 (Fed. Cir. 2001) (“[T]he literal scope of the term is limited to what it was understood to mean at the time of filing.”). CONCLUSIONS We conclude that the Appellants have not shown that the Examiner erred in rejecting claim 42 under 35 U.S.C. § 101 as being directed to non- statutory subject matter. We conclude that the Appellants have shown that the Examiner erred in rejecting claim 42 under 35 U.S.C. § 112, second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which applicants regard as the invention. DECISION The decision of the Examiner to reject claim 42 is affirmed. Appeal 2009-004444 Application 09/956,372 7 AFFIRMED JRG BLAKELY SOKOLOFF TAYLOR & ZAFMAN LLP 1279 OAKMEAD PARKWAY SUNNYVALE, CA 94085-4040