Ex Parte Shields

Board of Patent Appeals and Interferences

Dec 22, 2008

09651979 (B.P.A.I. Dec. 22, 2008)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________________

Ex parte ADRIAN SHIELDS

Appeal 2008-4271
Application 09/651,9791
Technology Center 2400
____________________

Decided: December 22, 2008
____________________

Before LANCE LEONARD BARRY, JEAN R. HOMERE, and JAY P.
LUCAS, Administrative Patent Judges.

HOMERE, Administrative Patent Judge.

DECISION ON APPEAL
I. STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 21 through 38. Claims 1 through 20 have been canceled.
We have jurisdiction under 35 U.S.C. § 6(b). We affirm-in-part.

1 Filed on August 31, 2000. The real party in interest is NCR Corp.
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The Invention
As shown in Figure 4, Appellant invented a method and apparatus
(50) for securely exchanging transaction information between in a portable
terminal (PDA, 10) and a financial institution (ATM 52). (Spec. 1.) As
depicted in Figures 1-2, the portable terminal may be a personal digital
assistant (PDA) (10), which includes a storage area (28) that contains
financial account data (30) for a financial institution, an ATM program (32)
for preparing ATM transactions, and an encryption program (34) for
encrypting the prepared ATM transactions. (Spec. 7.) Upon a user starting
a new session for performing a financial transaction on the PDA (10), the
encryption program (34) obtains a seed from stored records and hashes it to
thereby generate a new session key for the transaction. (Spec. 8.) The PDA
(10) then uses a public key stored in the account data (30) to encrypt the new
session key, which is transmitted to the automated teller machine (ATM)
(52). (Spec. 9.) The PDA (10) subsequently uses the session key to decrypt
an encrypted response received from the ATM (52). (Id.)
Illustrative Claim
Independent claim 21 further illustrates the invention. It reads as
follows:
21. A method of operating a portable computer, comprising:

a) storing records of events experienced by the computer in user-
accessible memory within the computer;

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b) using one or more of the records as seed for generating plain text of
a first session key KI; and then

c) encrypting KI, transmitting Kl (encrypted) to an external terminal,
receiving an encrypted response from the external terminal, and de-crypting
the encrypted response using the plain text of KI.

Prior Art Relied Upon

The Examiner relies on the following prior art as evidence of
unpatentability:
Yacobi US 5,878,138 Mar. 2, 1999
Kawan US 2002/0062284 A1 May 23, 2002
(filed Jan. 28, 1999)

Alfred J. Menezes et al., Handbook of Applied Crytography, CRC Press, pp.
170-172, 494, and 552 (1997).

Rejections on Appeal
The Examiner rejects the claims on appeal as follows:
A. Claims 21 through 34 and 38 stand rejected under 35 U.S.C. § 103(a)
as being unpatentable over the combination of Yacobi and Menezes.
B. Claims 35 through 37 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over the combination of Yacobi, Menezes, and Kawan.

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Appellant’s Contentions
Appellant argues that the combination of Yacobi and Menezes does
not render claims 21 through 34 and 38 unpatentable. (App. Br. 25-70,
Reply Br. 1-28.) Particularly, Appellant argues that Yacobi does not teach
or suggest decrypting on a portable computer an encrypted response using a
first session key. (App. Br. 25-31, Reply Br. 1-3.) Appellant argues that
while Yacobi discloses encrypting2 digital cash returned to an electronic
wallet, such encryption is not done using the generated session key. Further,
Appellant argues that Yacobi does not teach that the electronic wallet
decrypts the digital cash using the same generated session key. (Reply Br.
4-9.) Further, Appellant argues that there would be insufficient rationale to
support the Examiner’s suggested combination of Menezes’ data seed with
Yacobi’s session key to encrypt and decrypt a response, as recited in
independent claim 21. (App. Br. 40-47, Reply Br. 11-18.)
Examiner’s Findings/Conclusions
The Examiner finds that Yacobi’s disclosure of using the session key
to establish a secure channel through which the bank transmits to the
electronic wallet digital coin encrypted with its private key fairly teaches or

2 Appellant previously argued, at pages 25-27, 32-39 of the Appeal Brief,
that Yacobi’s disclosure of the bank hashing the digital cash does not teach
or suggest an encrypted response. However, in the Reply Brief, Appellant
appears to have acknowledged that Yacobi’s hashing of the digital cash in
conjunction with the issued digital certificates constitutes an encrypted
response. (Reply Br. 4.)
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suggests a portable computer that receives an encrypted response from an
external terminal using a session key, as recited in independent claim 21.
(Ans. 6-8.) Similarly, the Examiner finds that Yacobi’s disclosure of the
electronic wallet using the plain value of the received encrypted digital coin
at a merchant suggests that the digital coin must have been decrypted. (Id.)
Additionally, the Examiner finds that one of ordinary skill in the art would
have known how to generate Yacobi’s session key from Menezes’ seed.
(Ans. 9-12.) Therefore, the Examiner concludes that the combination of
Yacobi and Menezes renders claim 21 unpatentable. (Id.)

II. ISSUE
The pivotal issue before us is whether Appellant has shown that the
Examiner erred in concluding that the combination of Yacobi and Menezes
renders the claimed invention unpatentable. Particularly, the issue turns on
whether the ordinarily skilled artisan would have found sufficient rationale
to combine the cited references to teach (1) encrypting a generated session
key using a public key before transferring the encrypted key to an external
computer, and (2) decrypting an encrypted response using the session key, as
recited in independent claim 21.

III. FINDINGS OF FACT
The following findings of fact (FF) are supported by a preponderance
of the evidence.
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Yacobi
1. Yacobi discloses an electronic asset system for allowing an
electronic wallet and a bank’s computer to securely perform financial
transactions. As depicted in Figure 2, the electronic wallet (58) is a portable
computer manufactured with initial pairs of public and private keys, and a
corresponding certificate registered with the bank’s computer. The
electronic wallet has a processor, a program memory, a volatile memory,
and a non-volatile memory. (Col. 8, ll. 39-45, ll. 50-53.)
2. The electronic wallet (58) has a cryptographic program in
memory that directs the processor to encrypt/decrypt data, to generate a
unique pair of cryptographic keys that are transmitted to the bank’s
computer (62) along with the user’s identification. The bank’s computer
uses the transmitted pair of digital keys in conjunction with the registered
certificate to create an initial secure communication channel, which is used
to authenticate the digital wallet and the bank’s computer. (Col. 9, ll. 1-9.)
3. Upon completing the initial verification process, the user’s
wallet (58) generates a session key, which it uses to encrypt a message being
transferred to the bank’s computer. The wallet subsequently encrypts the
generated session key using the public exchange key of the bank’s computer
previously received in the bank’s certificate. Further, the wallet uses its own
private key to sign the encrypted message, which it transfers along with the
encrypted session key to the bank’s computer via the secure channel. (Col.
9, ll. 44-54.)
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4. Upon receiving the encrypted session key and the signed
encrypted message, the bank’s computer uses its own private exchange key
to decrypt the session key. Then, the bank’s computer uses the decrypted
session key to decrypt the signed encrypted message. Individual keys that
are used for each secure messaging and transmission are subsequently
destroyed. (Col. 9, ll. 54-57, col. 9, l. 65- col. 10, l. 1.)
5. Upon receiving a request from a user’s electronic wallet (58) to
obtain digital cash, the bank’s computer (62) generates a response message
including the requested digital cash, and a data string. It hashes the data
string, and uses its own private signing key to sign the hashed data string.
Additionally, the bank’s computer employs a different pair of signing keys
for each digital coin denomination. (Col. 10, ll. 17-31.)
6. Once the generated digital coins (70) are downloaded in the
electronic wallet over the secure communication channel (68), they are
stored in the wallet for later use. If the user wishes to purchase services or
items from a merchant (56), after establishing a secure communication
channel (72) with the merchant (56), the user digitally signs the coins
contained before tendering them to the merchant (56). (Col. 10, ll. 32-48.)
7. Periodically, the merchant’s computer (76) establishes a secure
communication channel to deposit the received signed coins with the bank’s
computer (62). (Col. 10, ll. 57-65.)

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Menezes
8. Menezes discloses a software-based random bit generator that
produces random bits based on a plurality of factors including user input,
system clock, contents of input/output buffer, operating system, and elapsed
time between keystrokes. (P. 172.)

Kawan
9. Kawan discloses a user entering a PIN into a PDA before the
user can be allowed to perform or complete a transaction. (P. 3, para.
[0030].)

IV. PRINCIPLES OF LAW
Claim Construction
"[T]he words of a claim 'are generally given their ordinary and
customary meaning.'" Phillips v. AWH Corp., 415 F.3d 1303, 1312 (internal
citations omitted). "[T]he ordinary and customary meaning of a claim term
is the meaning that the term would have to a person of ordinary skill in the
art in question at the time of the invention, i.e., as of the effective filing date
of the patent application." Id. at 1313.
"[T]he PTO gives claims their 'broadest reasonable interpretation.'"
In re Bigio, 381 F.3d 1320, 1324 (Fed. Cir. 2004) (quoting In re Hyatt, 211
F.3d 1367, 1372 (Fed. Cir. 2000)). "Moreover, limitations are not to be read
into the claims from the specification." In re Van Geuns, 988 F.2d 1181,
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1184 (Fed. Cir. 1993) (citing In re Zletz, 893 F.2d 319, 321 (Fed. Cir.
1989)). Our reviewing court has repeatedly warned against confining the
claims to specific embodiments described in the specification. Phillips v.
AWH Corp., 415 F.3d at 1323.
Obviousness
Appellant has the burden on appeal to the Board to demonstrate error
in the Examiner’s position. See In re Kahn, 441 F.3d 977, 985-86 (Fed. Cir.
2006) (“On appeal to the Board, an applicant can overcome a rejection
[under § 103] by showing insufficient evidence of prima facie obviousness
or by rebutting the prima facie case with evidence of secondary indicia of
nonobviousness.”) (quoting In re Rouffet, 149 F.3d 1350, 1355 (Fed. Cir.
1998)).
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., 127 S. Ct. 1727, 1734 (2007).

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," and discussed circumstances in which a patent might be determined to
be obvious. KSR, 127 S. Ct. at 1739 (citing Graham v. John Deere Co., 383
U.S. 1, 12 (1966)). The Court reaffirmed principles based on its precedent
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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.
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. at 1740.
The Federal Circuit recently recognized that "[a]n obviousness
determination is not the result of a rigid formula disassociated from the
consideration of the facts of a case. Indeed, the common sense of those
skilled in the art demonstrates why some combinations would have been
obvious where others would not." Leapfrog Enters., Inc. v. Fisher-Price,
Inc., 485 F.3d 1157, 1161 (Fed. Cir. 2007) (citing KSR, 127 S. Ct. 1727,
1739 (2007)). The Federal Circuit relied in part on the fact that Leapfrog
had presented no evidence that the inclusion of a reader in the combined
device was “uniquely challenging or difficult for one of ordinary skill in the
art” or “represented an unobvious step over the prior art." Id. at 1162 (citing
KSR, 127 S. Ct. at 1740-41).
One cannot show nonobviousness by attacking references individually
where the rejections are based on combinations of references. In re Merck
& Co., Inc., 800 F.2d 1091, 1097 (Fed. Cir. 1986).
The test for obviousness is what the combined teachings of the
references would have suggested to one of ordinary skill in the art. See In re
Kahn, 441 F.3d 977, 987-988 (Fed. Cir. 2006), In re Young, 927 F.2d 588,
591 (Fed. Cir. 1991) and In re Keller, 642 F.2d 413, 425 (CCPA 1981).
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Moreover, in evaluating such references it is proper to take into account not
only the specific teachings of the references but also the inferences which
one skilled in the art would reasonably be expected to draw therefrom. In re
Preda, 401 F.2d 825, 826 (CCPA 1968).

V. ANALYSIS
35 U.S.C. § 103
Claims 21-23, 35, and 38
Independent claim 21 recites in relevant part decrypting on a portable
computer an encrypted response using a generated session key. As detailed
in the Findings of Facts section, Yacobi discloses that the bank uses its own
private key to digitally sign a hash value to thereby create digital coins that
are downloaded into the user’s electronic wallet via a secure communication
channel. (FF. 5-6.) Yacobi further discloses that the user can purchase
goods or services from a merchant by signing the digital coins and
downloading them into the merchant’s computer via a secure channel. (FF.
7.) The ordinarily skilled artisan would recognize that the generated digital
coins that the user’s electronic wallet receives from the bank are not
encrypted, and need not be decrypted thereafter upon receipt. While it is
reasonable to find that Yacobi’s bank response to the user’s request utilizes
digitally signed cryptographic data to generate the digital coins, the
ordinarily skilled artisan would appreciate that the ensuing digital coins
downloaded into the electronic wallet are not encrypted. Therefore, we find
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no need in Yacobi’s system for decrypting the received digital coins on the
electronic wallet. Thus, we agree with Appellant that Yacobi does not teach
or suggest the decryption of an encrypted response using a generated session
key. Further, we find that Menezes does not cure the deficiencies of Yacobi.
It follows that Appellant has shown that the Examiner erred in concluding
that the combination of Yacobi and Menezes renders claim 21 unpatentable.
Since claims 22, 23, 35, and 38 recites the same disputed limitation,
we conclude for the reasons outlined above that Appellant has shown error
in the Examiner’s conclusion that the cited claims are unpatentable over the
suggested combination. Therefore, we will not sustain the Examiner’s
rejection of claims 21 through 23, 35, and 38.

Claims 24-34, and 36-37
As to claim 24, Appellant argues that the combination of Yacobi and
Menezes does not teach encrypting two session keys using a public key, and
transmitting the encrypted keys to an external device. (App. Br. 48-49). We
do not agree. As detailed in the Findings of Fact section, Yacobi discloses
that the electronic wallet uses a public exchange key received from the
bank’s computer to encrypt a generated session key, and subsequently
transfers the encrypted key to the bank. (FF. 3.) Further, Yacobi teaches
each key used for communication or transmission is subsequently destroyed.
(FF. 4.) The ordinarily skilled artisan would readily appreciate from
Yacobi’s teachings that for each new session, a new session key is
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generated, encrypted with the public exchange key before being transmitted
to the bank. Therefore, the combination of Yacobi and Menezes reasonably
teaches or suggests that the electronic wallet generates a plurality of session
keys that are encrypted with a public exchange key before being transmitted
to the bank.
Appellant did not provide separate arguments with respect to the
rejection of dependent claim 25. Consequently, claim 25 falls together with
representative claim 24. 37 C.F.R. § 41.37(c)(1)(vii).
As to dependent claims 26, 27, 32, and 37, Appellant argues that the
combination of Yacobi and Menzes does not teach or suggest decrypting on
a portable computer an encrypted message using a generated session key.
(App. Br. 49). We agree with Appellant for the reasons detailed above. We
therefore, will not sustain the Examiner’s rejection of these claims.
As to claims 28-29, Appellant argues that Yacobi teaches a tamper-
resistant device, as opposed to the claimed “no-secure area” for storing an
encryption key. (App. Br. 73.) We do not agree. As detailed in Findings of
Fact section, Yacobi discloses a volatile memory region for storing an
encryption key. (FF. 1.) The ordinarily skilled artisan would readily
recognize that the volatile memory is a non-secure area of memory.
Therefore, the combination of Yacobi and Menezes reasonably teaches or
suggests the limitations of the cited claims.
As to claims 33 and 36, Appellant argues that there is insufficient
rationale for combining Yacobi with Menezes and/Kawan to arrive to the
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claimed invention. (App. Br. 52-70.) We do not agree. The ordinarily
skilled artisan would appreciate that Yacobi, Menezes, and Kawan disclose
prior art elements that perform their ordinary functions to predictably result
in a portable computer wherein a user first enters a PIN to generate a seed to
thereby create a session key before the user can be allowed to perform or
complete a financial transaction with an ATM. We therefore, do not agree
with Appellant that there is insufficient rationale for combining cited
references. Likewise, we do not agree with Appellant that Menezes teaches
away from Yacobi. It follows that Appellant has not shown that the
Examiner erred in concluding that the combination of Yacobi, Menezes,
and/or Kawan renders the cited claims unpatentable.

VI. CONCLUSIONS OF LAW
A. Appellant has shown that the Examiner erred in concluding that the
combination of:
1. Yacobi and Menezes renders claims 21 through 23, 26, 27, 32,
and 38 unpatentable under 35 U.S.C. § 103(a).
2. Yacobi, Menezes, and Kawan renders claims 35 and 37
unpatentable under 35 U.S.C. § 103(a).
B. Appellant has not shown that the Examiner erred in concluding that
the combination of:
1. Yacobi and Menezes renders claims 24, 25, 28 through 31, 33,
and 34 unpatentable under 35 U.S.C. § 103(a).
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2. Yacobi, Menezes, and Kawan renders claim 36 unpatentable
under 35 U.S.C. § 103(a).

VII. DECISION
We reverse the Examiner’s decision to reject claims 21 through 23,
26, 27, 32, 35, 37, and 38. However, we affirm the Examiner’s decision to
reject claims 24, 25, 28 through 31, 33, 34, and 36.
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-IN-PART

rwk

MICHAEL CHAN
NCR CORPORATION
1700 SOUTH PATTERSON BLVD
DAYTON OH 45479-0001