Ex Parte Segal

Patent Trial and Appeal Board

Dec 24, 2013

11937628 (P.T.A.B. Dec. 24, 2013)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JEFFREY J. SEGAL
____________

Appeal 2011-012267
Application 11/937,628
Technology Center 3600
____________

Before ANTON W. FETTING, BIBHU R. MOHANTY, and
JOHN W. MORRISON, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL
Appeal 2011-012267
Application 11/937,628

2
STATEMENT OF THE CASE
The Appellant seeks our review under 35 U.S.C. § 134 (2002) of the
final rejection of claims 1, 3, 5-7, 9-15, and 17-24 which are all the claims
pending in the application. We have jurisdiction under 35 U.S.C. § 6(b)
(2002).

SUMMARY OF THE DECISION
We REVERSE.

THE INVENTION
The Appellant’s claimed invention is directed to imposing variable
pricing for commodities. (Spec. 4, ¶[0008]). Claim 1, reproduced below
with the numbering in brackets, is representative of the subject matter on
appeal.
1. A method of controlling consumption of a
commodity, said method comprising:
issuing a license, in advance of any purchase, to a
purchaser of said commodity, said license allowing purchase of
a specified quantity of said commodity within a specified time
period; wherein:
said license is issued for a license fee, [1] said license fee
being set according to a first schedule that divides said
specified quantity into ranges of numbers of units of said
commodity, and charges different per unit base fees for
different said ranges, said per unit fees increasing as the number
of units of said commodity in said ranges increase; [2] and
at a point of sale of a purchased quantity of said
commodity to said purchaser:
using an electronic point-of-sale device to electronically
check said license to verify that said specified quantity is not
exceeded by said purchased quantity in combination with prior
purchases under said license and completing sale of said
Appeal 2011-012267
Application 11/937,628

3
purchased quantity only when said specified quantity is not
exceeded, and
electronically recording said purchased quantity against
said license.

THE REJECTION
The following rejection is before us for review:
Claims 1, 3, 5-7, 9-15, and 17-24 are rejected under 35 U.S.C.
§ 103(a) as unpatentable over Adkins (U.S 2006/0190324 A1, pub. Aug. 24,
2006).

FINDINGS OF FACT
We find the findings of fact in the Analysis section below are
supported at least by a preponderance of the evidence1.

ANALYSIS
The Appellant argues that the rejection of claim 1 is improper because
the prior art does not disclose or suggest claim limitation [1]. (App. Br. 10-
16, Reply Br. 3-5). In contrast, the Examiner has determined that the
rejection of record is proper.
We agree with the Appellant. Claim limitation [1] requires:
[1] said license fee being set according to a first schedule that divides
said specified quantity into ranges of numbers of units of said
commodity, and charges different per unit base fees for different said
ranges, said per unit fees increasing as the number of units of said
commodity in said ranges increase[.]

1 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the U.S.
Patent and Trademark Office).
Appeal 2011-012267
Application 11/937,628

4
Thus, claim limitation [1] requires both a schedule that divides the quantity
into ranges with different per unit base fees for different ranges and that the
per unit fees increase as the number of units in the range increase.
First, with regard to dividing the specified quantity into ranges, the
Examiner has acknowledged that Adkins not show this. (Ans. 6). The
Examiner states that in light of Adkins’ disclosure at paragraph [0033] that
this would have been an obvious design choice. (Ans. 6, 8).
Second, in order to show that the unit fees increase with increasing
units the Examiner cites to Adkins at paragraph [0040] in which the last
sentence states “[g]enerally, the higher the usage rate becomes, the lower the
price of the supply item will become” (emphasis added). The Examiner’s
position is that there are only three options for the price as ranges increase:
the fees increase, decrease, or stay the same. (Ans. 5-6, 8). Our review of
Adkins at paragraphs [0040]-[0042] is that the reference is a conventional
system in which prices decrease as the number of units increases.
The rejection before us requires two modifications for both of: 1)
dividing the quantity into ranges and 2) having the price increase, rather than
decrease, as number of units increase. Here, the two cited modifications
would not have been predictable or obvious given the rationale that has been
presented before us. Here, the rejection before us lacks articulated reasoning
with rational underpinnings for making both the cited modifications together
in the manned claimed without impermissible hindsight. While we
acknowledge that placing quantities in ranges is well known the claim here
requires more than that and also requires that the prices increase rather than
decrease as the units increase. While the word “generally” does allow a
small semantic window to increase prices as the quantity increases, such a
Appeal 2011-012267
Application 11/937,628

5
modification is not suggested by the prior art here in combination with also
using the claimed ranges without impermissible hindsight given the rationale
that is presented before us.
More to the point, increasing price with volume is generally an ad hoc
pricing policy in the context of inelastic supply leading to a price floor, such
as cartel pricing or hard limits on total potential supply. In such instances,
pricing policy is designed to encourage transactions that will minimally
interrupt the current and future market. There would be little reason to
anticipate multiple levels of quantity purchases when quantity purchases are
not desirable. The instant case posits a different societal policy behind
pricing policy, which Examiner does not find in the prior art. Absent this,
Examiner’s finding that price ranges are matters of design choice run
counter to what one of ordinary skill would expect in the face of a pricing
policy discouraging the very quantity level pricing in the claims.
For these reasons the rejection of claim 1 and its dependent claims is
not sustained. The remaining claims containing a similar limitation and the
rejection of these claims is not sustained as well.

CONCLUSIONS OF LAW
We conclude that Appellant has shown that the Examiner erred in
rejecting claims 1, 3, 5-7, 9-15, and 17-24 under 35 U.S.C. § 103(a) as
unpatentable over Adkins.

DECISION
The Examiner’s rejection of claims 1, 3, 5-7, 9-15, and 17-24 is
reversed.
Appeal 2011-012267
Application 11/937,628

6

REVERSED

llw