Ex Parte Shichi

Board of Patent Appeals and Interferences

Mar 8, 2010

09883371 (B.P.A.I. Mar. 8, 2010)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte SHUJI SHICHI
____________

Appeal 2009-003977
Application 09/883,371
Technology Center 3600
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Decided: March 8, 2010
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Before MURRIEL E. CRAWFORD, TONI R. SCHEINER, and BIBHU R.
MOHANTY, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL
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Appeal 2009-003977
Application 09/883,371

STATEMENT OF THE CASE
The Appellant seeks our review under 35 U.S.C. § 134 (2002) of the
final rejection of claims 16-35 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 provide a data sale
settling method for a prepaid card (Spec. 1:24-26). Claim 16, reproduced
below, is representative of the subject matter of appeal.
16. A data sale immediate settling method comprising the
sequential steps of:
A) providing a user with a prepaid card linked to a database;
B) executing a first action chain for immediately settling a data
sale comprising the sequential sub-steps of
i) the user inputting a password number,
ii) a first validation of the prepaid card by comparing the user-
input password number to a system-set first-time password number
stored on the database as the current password number,
iii) the user entering a next-time password number and storing
the user-input next-time password number in the database as a new,
user-set next-time password number, and
iv) requesting a current monetary balance available on the
prepaid card; and
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C) executing another action chain comprising the sequential
sub-steps of
i) the user inputting another password number,
ii) validation of the prepaid card by a successful comparison
of the user-input another password number to the stored new, user-set
next-time password number,
iii) the user entering another next-time password
number and storing the user-input another next-time password
in the database as the new, user-set next-time password number
required for validation of the prepaid card in a next another
action chain, and
iv) requesting another current monetary balance
available on the prepaid card, wherein step C) is repeated.

THE REJECTIONS
The Examiner relies upon the following as evidence in support of the
rejections:
Parillo US 5,239,583 Aug. 24, 1993
Novoa US 6,636,973 B1 Oct. 21, 2003
Kwan US 2003/0200179 A1 Oct. 23, 2003
Rubin US 6,701,522 B1 Mar. 2, 2004

The following rejections are before us for review:
1. Claims 16-21 and 30-33 are rejected under 35 U.S.C. § 103(a)
as unpatentable over Kwan and Parillo.
2. Claims 22-26 and 29 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Kwan, Parillo, and Rubin.
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3. Claims 27-28 and 34-35 are rejected under 35 U.S.C. § 103(a)
as unpatentable over Kwan, Parillo, Rubin, and Novoa.

THE ISSUE
At issue is whether the Appellant has shown that the Examiner erred
in making the aforementioned rejections.
This issue turns on whether the prior art discloses or suggests a user
entered next-time password required for validation of the prepaid card in a
next another action chain.

FINDINGS OF FACT
We find the following enumerated findings of fact (FF) are supported
at least by a preponderance of the evidence:1
FF1. Kwan discloses a method, apparatus, and program to make payment in
any currency using pre-paid cards (Title).
FF2. Kwan discloses that the system stores monetary value to make
payments to merchants through a data network and that encrypted, dynamic
codes are used for each transaction (Abstract).
FF3. Parillo discloses a method for improved security using access codes
(Title) and that a PIN code is used with a prescribed “start” sequence
(Abstract).
FF4. Parillo at Col. 2:10-46 discloses that PIN codes may be used in the
invention.

1 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
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FF5. Parillo at Col. 3:58-4:25 discloses that the system increments at least
one of the digits of the stored PIN for that account.
FF6. Parillo at Col. 6:26-49 discloses how the CPU compares entered PIN
to the stored PIN code.
FF7. Parillo at the Abstract, Col. 2:10-46, Col. 3:58-4:25, and Col. 6:26-49
fails to disclose the user entering a user entered next-time password required
for validation of the prepaid card in a next another action chain.

PRINCIPLES OF LAW
Principles of Law Relating Claim Construction
We determine the scope of the claims in patent applications not solely
on the basis of the claim language, but upon giving claims their broadest
reasonable construction in light of the specification as it would be
interpreted by one of ordinary skill in the art. In re Am. Acad. of Sci. Tech.
Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). The properly interpreted claim
must then be compared with the prior art.

Principles of Law Relating to Obviousness
“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., 550 U.S. 398, 406
(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)
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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, 550 U.S. at 407 (“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 415-16, 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, 550 U.S. at 415, (citing Graham, 383 U.S.
at 12), 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. at 416.
The Court also stated “[i]f a person of ordinary skill can implement a
predictable variation, § 103 likely bars its patentability.” Id. at 417. 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 Court noted that “[t]o facilitate review, this analysis should be
made explicit.” Id. at 418 (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
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can take account of the inferences and creative steps that a person of
ordinary skill in the art would employ.” Id.

ANALYSIS
The Appellant argues that the rejection of claim 16 is improper and
notes that in claim 16 step C) iii) requires a “new, user-set next-time
password number” and that step B) iii) is similar (Br. 7). The Appellant
argues that Kwan fails to disclose these steps (Br. 8). The Appellant also
argues that the Examiner has improperly determined these steps to be “well
known actions” at the time of the invention as findings of fact (Br. 8-9;
Reply Br. 3-4). The Appellant also argues that the Examiner has improperly
determined that Parillo teaches a “user-set password” because the password
includes a prescribed start sequence (Br. 9; Reply Br. 5).
In contrast the Examiner has determined that rejection of claim 16
under Kwan and Parillo is proper (Ans. 14-18). The Examiner has not
disputed that Kwan fails to disclose steps B) iii or C) iii but asserts that the
validation of passwords and changing of passwords is well known (Ans. 5-
6). The Examiner has found that the argued limitation for a password set by
the user and not a password set by the system is not recited in the claims
(Ans. 15). The Examiner also has found that Parillo discloses these steps
(Ans. 7). The Examiner also asserts that it would have been obvious to
include a provision for changing a password as often as wished and at
anytime after a bill payment “to increase security of the password
protection” (Ans. 6-7).
We agree with the Appellant. We begin with claim construction and
note that claim 16 recites in part (emphasis added):
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ii) a first validation of the prepaid card by comparing the user-
input password number to a system-set first-time password number
stored on the database as the current password number,
iii) the user entering a next-time password number and storing
the user-input next-time password number in the database as a new,
user-set next-time password number, and
iv) requesting a current monetary balance available on the
prepaid card; and
C) executing another action chain comprising the sequential
sub-steps of
i) the user inputting another password number,
ii) validation of the prepaid card by a successful comparison
of the user-input another password number to the stored new, user-set
next-time password number,
iii) the user entering another next-time password
number and storing the user-input another next-time password
in the database as the new, user-set next-time password number
required for validation of the prepaid card in a next another
action chain, and
iv) requesting another current monetary balance
available on the prepaid card, wherein step C) is repeated.
Thus, we construe the claim to require in part: at the “first validation
of the prepaid card” that the “user enters[ing] a next-time password.” At a
subsequent “validation of the prepaid card the ‘user enters[ing] another next-
time password’” which is “required for validation of the prepaid card in a
next another action chain” which requires that the user changes the
password each time it used in the next, another action chain.
We agree with the Appellant that the cited limitations are not
disclosed by the prior art. The Examiner appears to have taken Official
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Notice in stating that is “well known” to change passwords (Ans. 5). While
it may have been well known to have users change passwords frequently, it
is unclear that it was “well known” to require that a new user-entered
password is required for the each, next another chain at the time the
invention was made. It is incumbent upon the examiner to establish a
factual basis to support the legal conclusion of obviousness. In re Kahn, 441
F.3d 977, 988 (Fed. Cir. 2006). The Examiner also appears to assert that
Parillo discloses the argued limitations B-iii and C-iii. Parillo however fails
to disclose the user entering a “user entered next-time password required for
validation of the prepaid card in a next another action chain” (FF7) at the
portions of the reference cited by the Examiner. Note that in Parillo that the
password is not totally “user-entered” since the system increments at least
one of the digits of the stored PIN for the account (FF5). For these reasons
the prior art has not disclosed limitations B-iii and C-iii of claim 16.
The Examiner also states that it would have been obvious to modify
Kwan or Parillo to include a provision to change a password as often as
wished and at any time for increased security (Ans. 6) but the claims require
a password change not “as often as wished” but specifically for each “next
another action chain.” Thus we hold that the Examiner’s rejection has failed
to provide an articulated reasoning with some rational underpinning to
support the legal conclusion of obviousness here since the claims
specifically require “user entered next-time password required for validation
of the prepaid card in a next another action chain” and we are constrained to
not sustain the rejection.
For these reasons the rejection of claim 16 and its dependent claims is
not sustained. Claim 30 contains limitations similar to the one addressed in
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claim 1 above. For these same reasons the rejection of claim 30 and its
dependent claims is also not sustained.

CONCLUSIONS OF LAW
We conclude that Appellant has shown that the Examiner erred in
rejecting claims 16-21 and 30-33 under 35 U.S.C. § 103(a) as unpatentable
over Kwan and Parillo.
We conclude that Appellant has shown that the Examiner erred in
rejecting claims 22-26 and 29 under 35 U.S.C. § 103(a) as unpatentable over
Kwan, Parillo, and Rubin.
We conclude that Appellant has shown that the Examiner erred in
rejecting claims 27-28 and 34-35 under 35 U.S.C. § 103(a) as unpatentable
over Kwan, Parillo, Rubin, and Novoa.

DECISION
The Examiner’s rejection of claims 16-35 is reversed.

REVERSED

JRG

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