Ex Parte 6324526 et al

Board of Patent Appeals and Interferences

Jan 29, 2009

90007481 (B.P.A.I. Jan. 29, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
____________________ 2
3
BEFORE THE BOARD OF PATENT APPEALS 4
AND INTERFERENCES 5
____________________ 6
7
Ex parte JOHN D’AGOSTINO 8
____________________ 9
10
Appeal 2008-5833 11
Reexamination Control 90/007,481 12
Patent 6,324,5261 13
Technology Center 3900 14
____________________ 15
16
Decided: January 30, 2009 17
____________________ 18
19
Before MURRIEL E. CRAWFORD, KEVIN F. TURNER and DANIEL S. 20
SONG, Administrative Patent Judges. 21
22
SONG, Administrative Patent Judge. 23
24
DECISION ON APPEAL 25
26
STATEMENT OF THE CASE 27
The Appellant appeals under 35 U.S.C. §§ 134(b) and 306 (2002) 28
from a Final Rejection of claims 1-17. Claims 18-32 have been canceled. 29

1 Issued November 27, 2001 to D’Agostino. Payment for the maintenance
fee due at 3.5 years was received by the USPTO on May 10, 2005.
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U.S. Patent No. 6,324,526 (‘526 patent) is presently involved in an 1
infringement litigation. D’Agostino v. Citibank, N.A., No. 8:04-cv-1506-T-2
23MSS (M.D. Fla.). The litigation has been STAYED pending final 3
resolution of the reexamination proceedings. Id., Order of April 6, 2005. We 4
have jurisdiction under 35 U.S.C. §§ 134(b) and 306 (2002). 5
The Appellant claims a method of performing credit card transactions 6
where a transaction code different from the credit card account number is 7
generated for use in one or more specific credit card transactions so that the 8
credit card account number is not disclosed thereby enhancing security. The 9
generated transaction code can fix, or limit, the amount and number of 10
transactions with a merchant. 11
Independent claim 16 reads as follows: 12
16. A method of performing secure credit card purchases, 13
said method comprising the steps of: 14
a) contacting a custodial authorizing entity having 15
custodial responsibility of account parameters of a 16
customer's credit card account; 17
b) supplying the custodial authorizing entity with at 18
least account identification data; 19
c) defining a plurality of payment categories, said 20
payment categories including at least (i) authorization 21
for a single transaction at a fixed amount for a 22
purchase; (ii) authorization for a single transaction at 23
a maximum amount for a purchase; and iii) 24
authorization for multiple transactions at a maximum 25
total amount for purchases; 26
d) designating at least one of said payment categories; 27
e) generating a transaction code reflecting at least said 28
designated payment category and a purchase 29
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authorization within said designated payment 1
category; 2
f) communicating the transaction code to a merchant to 3
consummate a purchase within defined purchase 4
parameters; 5
g) verifying that said defined purchase parameters are 6
within said designated payment category; and 7
h) obtaining said purchase authorization so as to 8
confirm that said defined purchase parameters are 9
within said designated payment category and 10
complete the purchase. 11
12
The prior art relied upon by the Examiner in rejecting the claims is: 13
Musmanno US 5,826,243 Oct. 20, 1998 14
Bernstein US 6,298,335 B1 Oct. 2, 2001 15
(filed Nov. 18, 1998) 16
Cohen US 6,422,462 B1 Jul. 23, 20022 17
The Examiner rejected claims 1, 2, 4-15 and 17 under 35 U.S.C. 18
§ 103(a) as unpatentable over Cohen and Musmanno. 19
The Examiner rejected claim 3 under 35 U.S.C. § 103(a) as 20
unpatentable over Cohen, Musmanno and Bernstein. 21
The Examiner rejected claim 16 under 35 U.S.C. § 102(e) as 22
anticipated by Cohen. 23
The Examiner rejected claim 17 under 35 U.S.C. § 305 as enlarging 24
the scope of a claim of the patent. 25
26

2 Filed on March 30, 1999 claiming the benefit of Provisional Application
No. 60/079,884 filed on Mar. 30, 1998.
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The Appellant relies upon the following exhibits in the record to 1
support patentability: 2
1. EXHIBIT A - Expert Analysis as to the Importance of 3
Convenience and Ease of Use Regarding Substitute Number Methods (in 4
Appeal Brief filed Oct. 19, 2007). 5
2. EXHIBIT B - Available Features of Early Substitute Number 6
Systems Introduced in the United States by Major Credit Issues (in Appeal 7
Brief filed Oct. 19, 2007). 8
3. EXHIBIT A - Reference Details From US Patent 6,324,526 9
(D’Agostino) In Support of the Meaning of claim 16(c) (in Reply Brief filed 10
Feb. 14, 2008). 11
4. EXHIBIT B - References to US Patent 6,422,462 to Cohen 12
Cited by Examiner Against Claim 16(c) (in Reply Brief filed Feb. 14, 2008). 13
5. EXHIBIT C - Reference Details From US Patent 6,324,526 14
(D’Agostino) In Support of the Meaning of claim 16(d) (in Reply Brief filed 15
Feb. 14, 2008). 16
6. EXHIBIT D - References to US Patent 6,422,462 to Cohen 17
Cited by Examiner Against Claim 16(d) (in Reply Brief filed Feb. 14, 2008). 18
7. EXHIBIT E - Reference Details From US Patent 6,324,526 19
(D’Agostino) In Support of the Meaning of claim 16(e) (in Reply Brief filed 20
Feb. 14, 2008). 21
8. EXHIBIT F - References to US Patent 6,422,462 to Cohen 22
Cited by Examiner Against Claim 16(e) (in Reply Brief filed Feb. 14, 2008). 23
24
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We AFFIRM the Examiner’s rejections. 1
2
ISSUES 3
The following issues have been raised in the present appeal. 4
1. Whether the Appellant has shown that the Examiner erred in 5
rejecting claim 17 as enlarging the scope of the ‘526 patent due to the 6
recitations “defining a payment category” and “providing authorization for 7
said purchase”. 8
2. Whether the Appellant has shown that the Examiner erred in 9
relying on Cohen as prior art under 35 U.S.C. § 102(e) as of the date of the 10
provisional application filing date. 11
3. Whether the Appellant has shown that Cohen’s utility 12
application was filed too late to claim priority to the provisional application, 13
and thus, the Examiner erred in relying on Cohen as prior art. 14
4. Whether the Appellant has shown that the Examiner erred in 15
finding that Cohen describes each and every limitation of claim 16. 16
5. Whether the Appellant has shown that the Examiner erred in 17
concluding that it would have been obvious to utilize the method of Cohen 18
for a repeating transaction at a fixed payment amount that are payable at a 19
fixed number of time intervals. 20
21
FINDINGS OF FACT 22
The record supports the following findings of fact (FF) by a 23
preponderance of the evidence. 24
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1. Cohen was filed on March 30, 1999 and claims the benefit 1
under § 119(e) of Provisional Application No. 60/079,884 filed March 30, 2
1998. 3
2. The ‘526 patent issued on November 27, 2001 to the Appellant 4
from patent application No. 09/231,745 filed January 15, 1999. 5
3. The Appellant does not challenge Cohen’s claim to priority 6
based on whether the granted patent is sufficiently supported by the 7
provisional application. 8
4. Cohen describes a method of performing secure credit card 9
purchases to reduce fraud in credit card transactions (col. 1, l. 60-col. 2, l. 8; 10
col. 2, ll. 32-35) by issuing a credit card with a credit card number that is 11
customized by the user so as to limit, or restrict, its use (col. 2, ll. 56-59; Fig. 12
1). The method includes contacting a credit card company (i.e., custodial 13
authorizing entity) that has custodial responsibility of account parameters of 14
a customer’s credit card account by calling the credit card company or via 15
the Internet (col. 3, ll. 42-48; col. 12, ll. 34-60), and supplying the custodial 16
authorizing entity with account identification data which may include the 17
credit card number and verification data (col. 3, ll. 42-48; col. 12, ll. 36-45). 18
5. Cohen also describes a plurality of payment categories that 19
includes (i) authorization for a single transaction at a fixed amount for a 20
purchase (col. 5, ll. 17-25), (ii) authorization for a single transaction at a 21
maximum amount for a purchase (col. 5, ll. 5-16; col. 8, ll. 37-39), and iii) 22
authorization for multiple transactions at a maximum total amount for 23
purchases (col. 8, ll. 41-49). 24
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6. Cohen teaches designation of a payment category via 1
customization of the particular credit card for limited use (col. 2, ll. 56-59), 2
for example, by using a form which is “filled out by the cardholder (or by 3
the authorized person on the card or an authorized card user) to set the 4
desired customization parameters” (col. 12, ll. 51-57). 5
7. Cohen further describes generating a credit card with a credit 6
card number (i.e., transaction code) that is restricted in use so as to reflect 7
the designated payment category and a purchase authorization within the 8
designated payment category (col. 2, ll. 35-39; col. 3, ll. 4-40). 9
8. In Cohen, the credit card number is communicated to a 10
merchant to consummate a purchase within the defined purchase parameters 11
upon verifying that the defined purchase parameters are within the 12
designated payment category (col. 5, ll. 35-49). The purchase is completed 13
upon obtaining the purchase authorization which confirms that the defined 14
purchase parameters are within the designated payment category (col. 5, ll. 15
44-49; Fig. 1). 16
9. Cohen further describes that the credit cart could be customized 17
“for use in a particular store itself or a particular chain of stores (such as a 18
particular restaurant, or a particular chain of restaurants)” (col. 8, ll. 32-35 19
and 40- 47). 20
10. Cohen does not describe a category having at least two 21
purchase authorizations for a repeating transaction at a fixed amount which 22
are payable at a fixed number of time intervals. 23
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11. Musmanno describes a system for controlling a master account 1
and nested sub-accounts where the sub-accounts separate out specific re-2
occurring expenses, such as car payments and mortgage payments (col. 2, ll. 3
40-47; col. 3, ll. 5-18; col. 5, ll. 26-59; Fig. 3, numerals 370, 380 and 390). 4
5
PRINCIPLES OF LAW 6
Reexamination 7
35 U.S.C. § 305 states “[n]o proposed amended or new claim 8
enlarging the scope of a claim of the patent will be permitted in a 9
reexamination proceeding under this chapter.” In determining whether a 10
patentee broadened a reexamined claim under 35 U.S.C. § 305, the same test 11
as for reissue claims is used. See In re Freeman, 30 F.3d 1459, 1464 (Fed. 12
Cir. 1994). “A claim of a reissue application is broader in scope than the 13
original claims if it contains within its scope any conceivable apparatus or 14
process which would not have infringed the original patent. A reissue claim 15
that is broader in any respect is considered to be broader than the original 16
claims even though it may be narrower in other respects.” Medtronic, Inc. v. 17
Guidant Corp., 465 F.3d 1360, 1374 (Fed. Cir. 2006) (internal citations 18
omitted). 19
20
Provisional Application 21
Provisional applications are authorized under 35 U.S.C. § 111(b), the 22
abandonment of which is set forth in 35 U.S.C. § 111(b)(5) that states: 23
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(5) ABANDONMENT.—Notwithstanding the 1
absence of a claim, upon timely request and as prescribed by 2
the Director, a provisional application may be treated as an 3
application filed under subsection (a). Subject to section 4
119(e)(3) of this title, if no such request is made, the 5
provisional application shall be regarded as abandoned 12 6
months after the filing date of such application and shall not be 7
subject to revival after such 12-month period. 8
9
Regarding claim of priority to provisional patent applications, 35 10
U.S.C. § 119(e) provides: 11
(1) An application for patent filed under section 12
111(a) or section 363 of this title for an invention disclosed in 13
the manner provided by the first paragraph of section 112 of 14
this title in a provisional application filed under section 111(b) 15
of this title, by an inventor or inventors named in the 16
provisional application, shall have the same effect, as to such 17
invention, as though filed on the date of the provisional 18
application filed under section 111(b) of this title, if the applica-19
tion for patent filed under section 111(a) or section 363 of this 20
title is filed not later than 12 months after the date on which the 21
provisional application was filed and if it contains or is 22
amended to contain a specific reference to the provisional 23
application. . . .. 24
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(2) A provisional application filed under section 1
111(b) of this title may not be relied upon in any proceeding in 2
the Patent and Trademark Office unless the fee set forth in 3
subparagraph (A) or (C) of section 41(a)(1) of this title has been 4
paid. 5
(3) If the day that is 12 months after the filing date of 6
a provisional application falls on a Saturday, Sunday, or Federal 7
holiday within the District of Columbia, the period of pendency 8
of the provisional application shall be extended to the next 9
succeeding secular or business day. 10
11
Anticipation 12
Regarding novelty “[a] claim is anticipated only if each and every 13
element as set forth in the claim is found, either expressly or inherently 14
described, in a single prior art reference.” Verdegaal Bros. v. Union Oil Co., 15
814 F.2d 628, 631 (Fed. Cir. 1987). 16
35 U.S.C. § 102(e) provides that: 17
A person shall be entitled to a patent unless-- 18
(e) the invention was described in . . . (2) a patent granted 19
on an application for patent by another filed in the United 20
States before the invention by the applicant for patent . . 21
.. 22
A granted patent that claims the benefit of an earlier filed provisional 23
application is prior art under § 102(e) as of the filing date of the provisional 24
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application. See Ex parte Yamaguchi 88 U.S.P.Q.2d 1606, 2008 WL 1
4233306 (Bd.Pat.App. & Interf. 2008). 2
Analysis of whether a claim is patentable over the prior art under 35 3
U.S.C. § 102 begins with a determination of the scope of the claim. We 4
determine the scope of the claims in patent applications not solely on the 5
basis of the claim language, but upon giving claims their broadest reasonable 6
construction in light of the specification as it would be interpreted by one of 7
ordinary skill in the art. In re Prater, 415 F.2d 1393, 1395-96 (CCPA 8
1969); In re Am. Acad. of Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 9
2004). The properly interpreted claim must then be compared with the prior 10
art. 11
“It is well settled that a prior art reference may anticipate when the 12
claim limitations not expressly found in that reference are nonetheless 13
inherent in it. Under the principles of inherency, if the prior art necessarily 14
functions in accordance with, or includes, the claimed limitations, it 15
anticipates.” In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed. Cir. 16
2002). Once a prima facie case of anticipation has been established, the 17
burden shifts to the Appellant to prove that the prior art product does not 18
necessarily or inherently possess the characteristics of the claimed product. 19
In re Best, 562 F.2d 1252, 1255 (CCPA 1977); see also In re Spada, 911 20
F.2d 705, 708-09 (Fed. Cir. 1990). 21
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Obviousness 1
“Section 103 forbids issuance of a patent when ‘the differences 2
between the subject matter sought to be patented and the prior art are such 3
that the subject matter as a whole would have been obvious at the time the 4
invention was made to a person having ordinary skill in the art to which said 5
subject matter pertains.’” KSR Int'l Co. v. Teleflex Inc., 127 S.Ct. 1727, 6
1734 (2007). The question of obviousness is resolved on the basis of 7
underlying factual determinations including (1) the scope and content of the 8
prior art, (2) any differences between the claimed subject matter and the 9
prior art, (3) the level of skill in the art, and (4) where in evidence, so-called 10
secondary considerations. Graham v. John Deere Co., 383 U.S. 1, 17-18 11
(1966). In KSR, the Supreme Court emphasized “the need for caution in 12
granting a patent based on the combination of elements found in the prior 13
art,” and reaffirmed principles based on its precedent that “[t]he combination 14
of familiar elements according to known methods is likely to be obvious 15
when it does no more than yield predictable results.” KSR, 127 S.Ct. at 16
1739. 17
The Court explained: 18
When a work is available in one field of endeavor, design 19
incentives and other market forces can prompt variations 20
of it, either in the same field or a different one. If a 21
person of ordinary skill can implement a predictable 22
variation, §103 likely bars its patentability. For the same 23
reason, if a technique has been used to improve one 24
device, and a person of ordinary skill in the art would 25
recognize that it would improve similar devices in the 26
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same way, using the technique is obvious unless its 1
actual application is beyond his or her skill. 2
Id. at 1740. 3
The operative question is “whether the improvement is more than the 4
predictable use of prior art elements according to their established 5
functions.” Id. The Court noted that “[t]o facilitate review, this analysis 6
should be made explicit,” but “the analysis need not seek out precise 7
teachings directed to the specific subject matter of the challenged claim” Id. 8
at 1741, citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006). 9
10
ANALYSIS 11
For clarity, we address each of the various issues raised in the present 12
appeal infra in an order that differs slightly from that used by the Examiner 13
and the Appellant. 14
15
Rejection of claim 17 under 35 U.S.C. § 305 16
The Examiner rejects claim 17 under 35 U.S.C. § 305 as enlarging the 17
scope of a claim of the ‘526 patent being reexamined. The ‘526 patent has 18
only two independent claims, namely, claims 1 and 16. Claim 17 was added 19
together with claims 18-32 in the Amendment filed on April 3, 2006 (App. 20
Br. 5). Claims 18-32 have been canceled prior to the present appeal. 21
The Examiner contends that claim 17 is broader in scope than the 22
claims of the ‘526 patent because claim 17 recites “defining a payment 23
category,” whereas each of the patent claims recite “defining a plurality of 24
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payment categories” (Ans. 4). The Examiner also states that claim 17 also 1
fails to claim the step of designating at least one of the payment categories 2
recited in all of the claims of the ‘526 patent because a plurality of 3
categories is not recited (Ans. 4). Moreover, the Examiner contends that 4
claim 17 is broader in scope because it recites “providing authorization for 5
said purchase” instead of “obtaining said purchase authorization” as recited 6
in claims of the ‘526 patent (Ans. 4). 7
The Appellant disagrees and contends that claim 17 is “supported by 8
the specification,” and does not broaden the scope of the reexamined claims 9
(App. Br. 31). In particular, the Appellant contends that “a payment 10
category” is within the scope, and not broader than the scope of “a plurality 11
of payment categories” (App. Br. 32). The Appellant also contends that both 12
“obtaining said purchase authorization” and “providing authorization for 13
said purchase” involve authorization and are substantively the same, 14
irrespective of “who” is providing or obtaining the authorization (App. Br. 15
32 and 33). 16
We are not persuaded by the Appellant’s arguments and conclude that 17
the Examiner is correct in finding claim 17 to be broader in scope than the 18
claims of the ‘526 patent. Whether the new claim is supported by the 19
specification is not salient to the Examiner’s rejection because the rejection 20
at issue is not based on 35 U.S.C. § 112. Under 35 U.S.C. § 305, enlarging 21
the scope of a claim of the patent during reexamination is not permitted. A 22
claim is broader in scope than the original claims if it contains within its 23
scope, any conceivable apparatus or process which would not have infringed 24
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the original patent. See Medtronic, Inc. v. Guidant Corp., 465 F.3d at 1374. 1
A claim that is “broader in any respect is considered to be broader than the 2
original claims even though it may be narrower in other respects.” Id. 3
In the present appeal, independent claim 1 of the ‘526 patent recites 4
“defining a plurality of payment categories, at least one of said payment 5
categories including at least two of said purchase authorization for a 6
repeating transaction at a fixed amount payable at each of a fixed number of 7
time intervals.” The only other independent claim (claim 16) of the ‘526 8
patent recites “defining a plurality of payment categories, said payment 9
categories including at least (i) authorization for a single transaction at a 10
fixed amount for a purchase; (ii) authorization for a single transaction at a 11
maximum amount for a purchase; and (iii) authorization for multiple 12
transactions at a maximum total amount for purchases.” Hence, all of the 13
claims of the ‘526 patent require “defining a plurality of payment 14
categories” which requires more than one payment category. 15
In contrast, claim 17 merely recites “defining a payment category” 16
which requires defining only one payment category. Thus, any method 17
which would not have infringed the claims of the original ‘526 patent 18
because the method defined only one payment category would now infringe 19
claim 17 which does not require defining of a plurality of payment 20
categories. 21
Moreover, claim 17 recites “providing authorization for said 22
purchase” instead of “obtaining said purchase authorization” as recited in the 23
claims of the ‘526 patent. As observed by the Examiner, “the entity 24
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obtaining authorization would not reasonably be the entity providing the 1
authorization,” and accordingly, “providing and obtaining are not equivalent 2
steps when it comes to authorizing a purchase within the invention of the 3
reexamined patent” (Ans. 4 and 5). 4
We disagree with the Appellant’s contention that it is immaterial as to 5
who is providing, or obtaining, the authorization because this recited claim 6
limitation directly salient to determining whether a party directly infringes. 7
In particular, the recited claim limitation is salient to whether the merchant 8
obtaining the purchase authorization directly infringes the claims of the ‘526 9
patent, or the custodial authority providing the authorization directly 10
infringes. Thus, claim 17 broadens the scope of the claims of the ‘526 11
patent to ensnare a new party, not withstanding provisions for active 12
inducement or contributory infringement under 35 U.S.C. § 271. 13
Thus, in view of the above, the Appellant has not shown that the 14
Examiner erred in rejecting claim 17 under 35 U.S.C. § 305 as enlarging the 15
scope of a claim of the ‘526 patent being reexamined. 16
17
Prior art status of Cohen 18
Before turning to the Examiner’s novelty and obviousness rejections, 19
we address the contested prior art status of Cohen on which these rejections 20
rely. If Cohen is not citable prior art against the ‘526 patent being 21
reexamined, the Examiner’s rejections cannot stand. 22
Cohen was filed on March 30, 1999 and claims the benefit under 23
§ 119(e) of Provisional Application No. 60/079,884 filed March 30, 1998. 24
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The Appellant challenges the prior art status of Cohen and the Examiner’s 1
reliance thereon, on several different bases, each of which we address under 2
separate sub-headings for clarity. As a preliminary matter, we note that the 3
Appellant is not challenging the Cohen’s claim to priority based on whether 4
the granted Cohen patent is sufficiently supported by the underlying 5
provisional application. 6
7
Prior art date based on provisional application’s filing date 8
The Appellant first contends Cohen should not be given prior art date 9
of March 30, 1998 which is the filing date of the provisional application 10
(App. Br. 34). The Appellant argues that using the filing date of the 11
provisional application for the § 102(e) prior art date of a patent granted on a 12
35 U.S.C. § 111(a) application (which claims the benefit of the provisional 13
application) is clearly erroneous and not supported by the associated 14
precedent and statutory language (App. Br. 35). 15
In support, the Appellant relies on the distinction between the 16
“priority” benefit nature of 35 U.S.C. § 119 and the prior art, patent-17
defeating nature of 35 U.S.C. § 102 as recognized in In re Hilmer to contend 18
that it is improper for the U.S. Patent and Trademark Office (hereinafter 19
“USPTO”) to use the filing date of Cohen’s earlier provisional application as 20
the prior art date of subsequently issued Cohen’s utility application (App. 21
Br. 35-37). See In re Hilmer, 359 F.2d 859, 877 (CCPA 1966) (priority 22
provisions under § 119 are patent saving provisions and foreign priority date 23
is not the prior art date under § 102(e) because the foreign application is not 24
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an application filed in the U.S. as required by § 102(e)). The Appellant 1
further argues that the justification for using the filing date of a U.S. patent 2
application as a prior art date in Alexander Milburn Co. v. Davis-3
Buornonville Co. and Hazeltine Research, Inc. et al, v. Brenner, 4
Commissioner of Patents is not applicable to provisional applications 5
because a provisional application could never issue into a patent and do not 6
include claims (App. Br. 38 and 39; Reply Br. 5). See Alexander Milburn 7
Co. v. Davis-Buornonville Co., 270 U.S. 390 (1926) (basis for treating the 8
application filing date as the prior art date is that the delays in examining the 9
patent application should not penalize the first applicant who has taken the 10
steps required); see also Hazeltine Research, Inc. et al, v. Brenner, Comm’r 11
of Patents, 382 U.S. 252 (1965). We disagree. 12
As acknowledged by the Appellant (App. Br. 35), USPTO uses the 13
filing date of a provisional application for the prior art date under 35 U.S.C. 14
§ 102(e) for granted patents that claim priority to the provisional 15
application3. Subsequent to the filing of the Appellant’s Appeal Brief on 16

3 See MPEP ¶¶ 706.02(f)(1), 2136.03(III); see also 60 Fed. Reg. 20195,
20197 (April 25, 1995) which states:
Section 119(e)(1) of title 35, United States Code, provides that
if all of the conditions of 35 U.S.C. 119 (e)(1) and(e)(2) are
met, an application for patent filed under 35 U.S.C. 111(a) or
363 shall have the same effect as though filed on the date of the
provisional application. Thus, the effective United States filing
date of an application for patent filed under 35 U.S.C. 111(a),
and entitled to benefits under 35 U.S.C. 119(e), is the filing date
of the provisional application. Any patent granted on such an
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October 19, 2007 and the Reply Brief on January 28, 2008, we addressed 1
several of the arguments raised by the Appellant in Ex parte Yamaguchi 2
where we upheld the Examiner’s rejections based on the prior art treatment 3
under § 102(e) of a granted patent as of the filing date of an earlier filed 4
provisional application. See Ex parte Yamaguchi, App. No. 2007-4412 5
(Bd.Pat.App. & Interf. 2008) (available at 6
http://www.uspto.gov/web/offices/dcom/bpai/prec/fd074412.pdf) 7
(precedential). 8
With respect to whether a provisional application is an application for 9
patent under § 102(e), claims are not required under § 111(b) in provisional 10
applications, and relying on § 111, Yamaguchi states: 11
Based on this express intent to apply the provisions of 12
Title 35 relating to “applications for patent” to provisional 13
applications (except for four enumerated sections noted in § 14
111(b)(8)), a provisional application can therefore be 15
reasonably considered an “application for patent” within the 16
meaning of § 102(e). 17
Id. at *9. 18
With respect to prior art status as of the date of filing the provisional 19
application, Yamaguchi concludes: 20
In sum, the statutory scheme of Title 35 indicates that 21
Congress intended for “applications for patent” under § 102(e) 22

application, is prior art under 35U.S.C. 102(e) as of the filing
date of the provisional application. (Emphasis added).
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to apply to both regular utility applications and provisional 1
applications, particularly when considering §§ 111(b) and 2
102(e) together. As a published “application for patent” under 3
this statutory framework, a provisional application-like a 4
regular utility application-constitutes prior art for all that it 5
teaches and, as such, promotes the progress of the useful arts. 6
Id. at *17. 7
With respect to the Appellant’s argument based on the inapplicability 8
of the rationale articulated in Milburn and Hazeltine to provisional 9
applications which cannot issue as a patent, Yamaguchi states: 10
The fact that provisional applications require an 11
additional step for publication does not, in our view, render 12
them any less applicable to the legal fiction of Milburn 13
underpinning § 102(e). According to the Wertheim court, 14
Milburn is premised on the notion that an application with a 15
patentable claimed invention can theoretically issue the same 16
day it is filed. Wertheim, 646 F.2d at 537. Even assuming, 17
without deciding, that this legal fiction is still viable, we see no 18
reason why it could not apply to provisional applications where 19
the disclosure otherwise supports the claimed invention under 20
§ 112, first paragraph. That is, if a patent can theoretically 21
issue the same day a non-provisional application is filed under 22
this fiction, we see no reason why such a patent could not 23
likewise theoretically issue the same day that a provisional 24
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application was filed. The applicant for a non-provisional 1
application may still have to amend the claims and/or 2
disclosure, and must pay the issue fee, to obtain a published 3
patent in this situation irrespective of whether a provisional 4
application was filed or not. Thus, applicants must affirmatively 5
act under this fiction to cause the application to issue on the 6
same day of filing for both non-provisional and provisional 7
applications. . . . filing a provisional application in the USPTO 8
that meets the statutory requirements, in effect, provides a self-9
authenticating instrument establishing a date of disclosure for 10
the subject matter contained within the instrument. As a 11
constructive reduction to practice, this authenticated disclosure 12
serves as prima facie evidence that the applicant was in 13
possession of the subject matter disclosed in the provisional 14
application when it was filed. While the public is not yet 15
notified of this disclosure when it is authenticated, the 16
authenticated disclosure will be publicized when the applicant . 17
. . files a corresponding § 111(a) utility application (i.e., via a 18
published application under § 122(b) or as a granted U.S. 19
patent). That is, either publication event will publicize the 20
authenticated disclosure of the underlying provisional 21
application. Like a regular utility application, the provisional 22
application is considered prior art for all that it teaches. 23
Id. at *13-*15. 24
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We acknowledge that the facts of the present appeal are somewhat 1
different from those presented in Yamaguchi in that Cohen’s provisional and 2
non-provisional applications were filed prior to the enactment of the 3
American Inventors Protection Act of 19994 (hereinafter “AIPA”) whereas 4
in Yamaguchi, the provisional application and the resultant granted patent 5
held to be prior art were filed subsequent to AIPA. The AIPA provided for 6
18 month publication under 35 U.S.C. § 122(b) and conversion of 7
provisional applications into non-provisional applications under 35 U.S.C. 8
§ 111(b)(5). Both of these provisions were partly relied upon by the Board 9
in the rationale of Yamaguchi. See Id. at *12-*13. 10
However, we do not find these factual distinctions as negating the 11
applicability of Yamaguchi in the present appeal. Firstly, access to the 12
provisional application has been provided for granted patents claiming 13
benefit to the provisional application5 since implementation of provisional 14

4 American Inventors Protection Act of 1999, Pub. L. 106-113, 113 Stat.
1501 (1999).

5 60 Fed. Reg. 20195, 20206 (1995), in response to a comment, states:
Section 1.14 relating to access applies to all applications
including provisional applications. If the benefit of a
provisional application is claimed in a later filed 35 U.S.C.
111(a) application which resulted in a patent, then access to the
provisional application will be available to the public pursuant
to § 1.14. The mere fact that a provisional application is
claimed in a later filed 35 U.S.C. 111(a) application does not
give the public access to the provisional application unless the
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applications in the Uruguay Round Agreements Act6. In addition, AIPA 1
provides for the conversion of provisional applications into non-provisional 2
applications under 35 U.S.C. § 111(b)(5) for provisional applications filed 3
on or after June 8, 19957, which includes the provisional application of 4
Cohen filed on March 30, 1999. 5
Hence, in view of the above, we find the Appellant’s arguments that 6
the filing date of a provisional application cannot be used for the §102(e) 7
prior art date of a granted patent is contrary to the current patent law. 8
9
Timely filing of utility applications 10
The Appellant also argues that Cohen’s non-provisional application 11
cannot claim priority to the provisional application because the non-12
provisional application was filed on March 30, 1999, which was the date of 13
abandonment of Cohen’s provisional application (App. Br. 40). The 14
Appellant argues that at the time of filing the non-provisional application, 35 15

35 U.S.C. 111(a) application issues as a patent. (Emphasis
added).

6 Uruguay Round Agreements Act, Public Law 103-465 (1994).

7 AIPA Section 4801(d) states:
EFFECTIVE DATE - The amendments made by this section
shall take effect on the date of the enactment of this Act and
shall apply to any provisional application filed on or after June
8, 1995, except that the amendments made by subsections (b)
and (c) shall have no effect with respect to any patent which is
the subject of litigation in an action commenced before such
date of enactment. (Emphasis added).
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U.S.C. § 119 stated that a provisional application could not be relied upon 1
under § 119(e)(2) unless “the provisional application was pending on the 2
filing date of the application under section 111(a) or section 363 of this 3
title.” However, because 35 U.S.C. § 111(b)(5) states that the provisional 4
application is regarded as abandoned 12 months after its filing date, the 5
Appellant contends that Cohen’s utility application was filed while the 6
provisional application was abandoned (App. Br. 40). 7
We are not persuaded. The wording of 35 U.S.C. § 111(b)(5) which 8
states that a provisional application is regarded “abandoned 12 months after 9
the filing date” does not preclude filing the non-provisional application on 10
the same day as the date of abandonment of the provisional application 11
because, as noted by the Examiner (Ans. 27), the abandonment occurs some 12
time during the date that is 12 months after the filing date, the relevant date 13
encompassing a range of time. Hence, the USPTO allows applicants to file a 14
non-provisional application claiming priority to the provisional application 15
on the same day as the date of abandonment of the provisional application8. 16

8 Example set forth in M.P.E.P. §201.04(b) demonstrates that the non-
provisional application can be filed on the date of abandonment of the
provisional application. If the Appellant’s assertion is correct, the non-
provisional application as provided in the example would have to be filed on
January 14, 2000 which does not fall on the weekend so as to require an
extension of the period of pendency into the following week.

M.P.E.P. §201.04(b) Provisional Application states:
For example, if a provisional application was filed on January
15, 1999, the last day of pendency of the provisional
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The Appellant further argues that it was not until November 29, 1999 1
that § l19(e)(2) was amended to delete the co-pendency requirement to 2
enable “the modern practice of affording a priority claim on the 3
abandonment date of the provisional” (App. Br. 40 and 41). However, we 4
do not find support for the Appellant’s argument. Indeed, the amendment to 5
§ l19(e)(2) was made by AIPA Section 4801(b) (Technical Amendment 6
Relating to Weekends and Holidays) to delete the copendency requirement 7
in order to address the problem of the final priority date falling on the 8
weekend or a federal holiday,9 not so as to allow a priority claim on the 9
abandonment date of a provisional application as alleged by the Appellant. 10

application under 35 U.S.C. 111(b)(5) and 35 U.S.C. 119(e)(3)
is extended to January 18, 2000 (January 15, 2000 is a Saturday
and Monday, January 17, 2000 is a Federal holiday and
therefore, the next succeeding business day is Tuesday, January
18, 2000). A nonprovisional application claiming the benefit of
the provisional application must be filed no later than January
18, 2000.

9 65 Fed. Reg. 50092, 50098 (2000), in a response to a comment, states:
Prior to enactment of the American Inventors Protection Act of
1999, a nonprovisional application claiming the benefit of a
provisional application under 35 U.S.C. 119(e) must have been:
(1) Filed not later than within twelve months after the filing
date of the provisional application; and (2) filed during the
pendency of the provisional application. Section 4801 of the
American Inventors Protection Act of 1999 amended 35 U.S.C.
119(e) to eliminate the requirement that a nonprovisional
application claiming the benefit of a provisional application
must have been filed during the pendency of the provisional
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application, but did not change the requirement that a
nonprovisional application claiming the benefit of a provisional
application be filed not later than within twelve months after
the filing date of the provisional application. The provisions of
35 U.S.C. 21(b) extend the twelve-month period in 35 U.S.C.
119(e)(1) to the next succeeding secular or business day if the
last day of that twelve-month period falls on a Saturday,
Sunday, or Federal holiday. See Dubost v. U.S. Patent and
Trademark Office, 777 F.2d 1561, 1562, 227 USPQ 977, 977
(Fed. Cir. 1985), and Ex parte Olah, 131 USPQ 41, 42–43 (Bd.
Pat. App. 1961). The reason for the caveat in former §
1.78(a)(3) is that: (1) 35 U.S.C. 119(e)(2) formerly required that
a nonprovisional application claiming the benefit of a
provisional application must have been filed during the
pendency of the provisional application; and (2) 35 U.S.C.
111(b)(5) provides that a provisional application will become
abandoned twelve months after its filing date regardless of what
action is taken or fee is paid in such provisional application.
Thus, the provisions of 35 U.S.C. 21(b) do not appear to extend
the twelve-month period in 35 U.S.C. 111(b)(5) to the next
succeeding secular or business day if the last day of that twelve-
month period falls on a Saturday, Sunday, or Federal holiday.
The American Inventors Protection Act of 1999 amended 35
U.S.C. 119 to: (1) Eliminate the requirement that a
nonprovisional application claiming the benefit of a provisional
application must have been filed during the pendency of the
provisional application (35 U.S.C. 119(e)(2)); and (2) extend
the twelvemonth period in 35 U.S.C. 111(b)(5) to the next
succeeding secular or business day if the last day of that twelve-
month period falls on a Saturday, Sunday, or Federal holiday
(35 U.S.C. 119(e)(3)).

M.P.E.P. §201.04(b) Provisional Application also states:
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Hence, in view of the above, the Appellant’s argument that Cohen’s 1
non-provisional application was filed too late and cannot claim priority to 2
the provisional application is unpersuasive. 3
4
Retroactivity 5
The Appellant further argues that “retroactive application of new 6
statutes, as a basis to establish new prior art rejections, is not permissible 7
under the takings provision of the 5th amendment of the United States 8
Constitution” (App. Br. 40 and 41; Reply Br. 6 and 7). In this regard, the 9
Appellant challenges the retroactive provisions stating that the retroactive 10
application of the amended § 119 would “confer additional, patent-defeating 11

Public Law 106-113 amended 35 U.S.C. 119(e)(3) to extend the
period of pendency of a provisional application to the next
succeeding business day if the day that is 12 months after the
filing date of a provisional application falls on a Saturday,
Sunday, or Federal holiday within the District of Columbia. See
also 37 CFR 1.7(b). 35 U.S.C. 119(e)(3) as amended by Public
Law 106-113 is effective as of November 29, 1999 and applies
to any provisional applications filed on or after June 8, 1995 . .
..

M.P.E.P. § 201.11(II)(A) Claiming the Benefit of Provisional Applications
states:
Public Law 106-113 amended 35 U.S.C. 119(e)(2) to eliminate
the copendency requirement for a nonprovisional application
claiming benefit of a provisional application. 35 U.S.C.
119(e)(2) as amended by Public Law 106-113 is effective as of
November 29, 1999 and applies to any provisional applications
filed on or after June 8, 1995 . . ..

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rights to the cited reference that it did not possess on March 30, 1999, while 1
at the same time stripping rights from Appellant by creating prior art that did 2
not qualify as such at that time” (App. Br. 40 and 41; Reply Br. 6). 3
Similarly, the Appellant further challenges the subsequent Intellectual 4
Property and High Technology Technical Amendments Act of 2002 which 5
revised § 102(e) to make the revised version thereof applicable to all patents 6
and all applications for patents pending on, or filed after, November 29, 7
200010. 8
However, the Appellant is submitting arguments which are beyond the 9
jurisdiction of the Board. The establishment of the Board and its duties are 10
set forth in 35 U.S.C. § 6, and in reexaminations, the statutory duties of the 11
Board are set forth under 35 U.S.C. §§ 134(b) and 306. There is no 12
provision for resolving the types of arguments submitted herein by the 13
Appellant, and as such, the Appellant’s arguments cannot be addressed by 14
the Board. 15
16
Rejection of claim 16 under 35 U.S.C. § 102(e) 17
Having established supra that Cohen is prior art against the ‘526 18
patent as of March 30, 1998, we now turn to the substance of the prior art 19
rejections based on Cohen. 20

10 Intellectual Property and High Technology Technical Amendments Act of
2002, Pub. L. 107-273 (2002).
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The Examiner rejects claim 16 under 35 U.S.C. § 102(e) stating that 1
Cohen discloses each and every limitation recited in claim 16 (Ans. 5; FF 4-2
8). The Appellant initially contends that the limitation “payment categories” 3
should be construed to mean that the payment categories are predetermined, 4
and refers to various portions in the specification of the ‘526 patent that use 5
the term “predetermined payment categories” in support (App. Br. 13 and 6
14; EXHIBIT A (in Reply Brief filed Feb. 14, 2008)). In EXHIBIT B (in 7
Reply Brief filed Feb. 14, 2008), the Appellant seeks to distinguish the 8
limitation of paragraph (c) of claim 16 from Cohen based on the Appellant’s 9
construction thereof. The Appellant contends that the method described in 10
Cohen does not teach, disclose or suggest the recited “predetermined 11
payment categories” (App. Br. 16). We do not agree. 12
Firstly, the Appellant’s argument fails from the outset because it is not 13
based on limitations appearing in the claims. In re Am. Acad. of Sci. Tech. 14
Ctr., 367 F.3d at 1364. The claims merely require “a plurality of payment 15
categories” that includes (i) authorization for a single transaction at a fixed 16
amount for a purchase; (ii) authorization for a single transaction at a 17
maximum amount for a purchase; and iii) authorization for multiple 18
transactions at a maximum total amount for purchases. Such payment 19
categories, which are designated by the user during customization, are 20
clearly described in Cohen (FF 5 and 6). 21
While EXHIBIT A (in Reply Brief filed Feb. 14, 2008) does identify 22
numerous instances in the ‘526 patent that support the Appellant’s claim 23
construction, during prosecution, claims are to be given their broadest 24
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reasonable construction, and “[a]bsent claim language carrying a narrow 1
meaning, the PTO should only limit the claim based on the specification or 2
prosecution history when those sources expressly disclaim the broader 3
definition.” See In re Self, 671 F.2d 1344, 1348 (CCPA 1982); In re Bigio, 4
381 F.3d 1320, 1325 (Fed Cir. 2004). As noted by the Examiner (Ans. 19), 5
there does not appear to be a specific definition or a disclaimer within the 6
Specification of the present case which would require a narrower 7
construction of “payment categories” to require the payment categories to be 8
“predetermined.” 9
The Appellant appears to be confusing claim interpretation principles 10
applied during patent prosecution with principles applied during validity and 11
infringement analysis, and is requesting the Examiner and the Board to 12
narrowly construe the limitations in claim 16 so as to avoid reading on the 13
prior art of record even though there is no basis to do so. See In re Am. 14
Acad. of Sci. Tech. Ctr., 367 F.3d at 1364 (stating giving broad construction 15
to claim terms is not unreasonable during examination because the applicant 16
can amend the claims, and further stating that “it is error for the Board to 17
‘appl[y] the mode of claim interpretation that is used by courts in litigation, 18
when interpreting the claims of issued patents in connection with 19
determination of infringement and validity’”) (citing In re Zletz, 893 F.2d 20
319 (Fed. Cir. 1989)). Hence, the Appellant’s argument for a more limiting 21
construction of “payment categories” is unpersuasive and the Appellant has 22
failed to show that the Examiner erred. 23
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Moreover, assuming arguendo that “payment categories” should be 1
construed to mean “predetermined payment categories” as advocated by the 2
Appellant, we fail to see how such a claim construction distinguishes claim 3
16 from Cohen. In particular, to implement the method of Cohen using the 4
computer form described therein (FF 6), the customizable parameters must 5
have been selected for inclusion on such a computer form. Again, Cohen 6
teaches that payment categories as recited in claim 16 are included in the 7
various parameters that are designated by the user during customization (FF 8
5 and 6). Hence, the Examiner is correct in finding that “[e]ven if the 9
offerings/categories by the credit card company are numerous, they are 10
nonetheless predefined and predetermined by the credit card company for 11
selection by the user” (Ans. 20). Thus, even if the “payment categories” is 12
interpreted to mean “predetermined payment categories” as argued by the 13
Appellant, Cohen still inherently discloses the method of claim 16 because 14
the payment categories must be determined prior to (i.e., predetermined) 15
inclusion in the computer form as a user customizable parameter. See In re 16
King, 801 F.2d at 1327. 17
The Appellant also argues that in the invention of claim 16, 18
predetermined payment categories are “clearly defined as functioning to 19
facilitate the consummation of a variety of transaction types through the use 20
of a predetermined and/or predefined set of limiting transaction parameters,” 21
whereas in Cohen, the described customization is attained in an “arduous, 22
open-ended manner” that is “inefficient” and “complicated” (App. Br. 17). 23
In addition, EXHIBIT B - References to US Patent 6,422,462 to Cohen 24
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Cited by Examiner Against Claim 16(c) (in Reply Brief filed Feb. 14, 2008) 1
states that Cohen does not disclose the plurality of predefined functional 2
categories as the means by which the numbers are customized. However, 3
the Appellant’s argument is not persuasive because, as discussed supra, the 4
method of Cohen defines a plurality of payment categories as recited in 5
claim 16 which function to customize, and restrict, the use of the credit card 6
depending on the user’s selection of a particular payment category (FF 4-6). 7
The Appellant further argues that the user-friendliness “clearly 8
distinguishes the present invention from Cohen,” and while “Cohen may 9
provide for customization of disposable credit card transaction parameters 10
such as single payment, fixed amount, etc., Cohen does not do so in the 11
manner of Appellant’s claimed method” (App. Br. 20). Hence, the 12
Appellant contends that because in the claimed invention, the user’s choices 13
are limited to payment categories defined in advance (i.e., to “predetermined 14
payment categories”), the Appellant’s method is user-friendly, efficient, and 15
likely to be used, whereas in Cohen, the customization allows for too many 16
options so that the method of Cohen is not user-friendly, inefficient, and 17
unlikely to be used (App. Br. 18-21). In support, the Appellant has 18
submitted EXHIBIT A - Expert Analysis as to the Importance of 19
Convenience and Ease of Use Regarding Substitute Number Methods (in 20
Appeal Brief filed Oct. 19, 2007) which tabulates excerpts from various 21
Internet web pages and periodicals that support the notion that consumers 22
require easy, user-friendly, security measures. 23
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However, user-friendliness is not a limitation in the claim at issue. 1
User-friendliness is also a matter of degree and opinion. The Appellant does 2
not proffer any persuasive evidence to establish a standard for determining, 3
or comparing, the user-friendliness of the method claimed with the method 4
described in Cohen. 5
The Appellant also refers to evidence in the record (presumably, 6
EXHIBIT B - Available Features of Early Substitute Number Systems 7
Introduced in the United States by Major Credit Issues (in Appeal Brief filed 8
Oct. 19, 2007)) that purports to show various companies which have 9
“attempted to maximize security for each particular credit card transaction,” 10
but “did not provide a plurality of predetermined selectable payment 11
categories,” as evidence that Cohen did not contemplate the claimed 12
invention, and that it would not have been obvious to modify Cohen given 13
the state of the art at the time (App. Br. 21 and 22). However, we fail to see 14
the particular relevance of the proffered evidence which merely helps to 15
establish the state of the art. What is required for anticipation rejection at 16
issue is the determination of claim scope and finding that a prior art 17
reference sets forth each and every element of the claims, either expressly or 18
inherently. See Verdegaal, 814 F.2d at 631. 19
The Appellant further contends that because Cohen does not disclose 20
“payment categories” as argued, Cohen also cannot disclose various steps 21
recited in claim 16 including “designating at least one of said payment 22
categories”, “generating a transaction code reflecting at least said designated 23
payment category”, etc. (App. Br. 23 and 24). However, because Cohen 24
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does disclose payment categories as discussed supra, we find these 1
arguments unpersuasive. 2
EXHIBIT D also of record seeks to distinguish Cohen and states that 3
Cohen presumes existence of a transaction code before the payment category 4
is designated which is “not consistent with the meaning” of claim 16. 5
However, the method of Cohen clearly teaches generating a credit card 6
number (i.e., transaction code) based on the user’s customized parameters 7
which includes payment categories (FF 6 and 7) thereby satisfying the 8
recited limitation. While a credit card account is presumed to exist in Cohen 9
(FF 4), we fail to see how this is any different from the invention of claim 16 10
which also presumes an account managed by a custodial authorizing entity. 11
EXHIBIT D also states that in Cohen, the user establishes the customization 12
parameters whereas in claim 16, the user designates the predefined 13
customization parameters. However, as discussed, Cohen describes user 14
selecting the customization parameters which satisfies the “designating” step 15
recited in claim 16 (FF 6). 16
EXHIBIT F seeks to distinguish the method disclosed in Cohen from 17
the limitation of claim 16 which recites “generating a transaction code 18
reflecting at least said designated payment category”. In this regard, 19
EXHIBIT F states that the method in Cohen includes embodiments (e.g., the 20
generated number is indistinguishable from regular credit card numbers) that 21
are not disclosed as an element of claim 16 (Ans. 6 and 7). However, the 22
Examiner’s primary argument is that “Cohen discloses this step by 23
disclosing that the credit card company issues and activates the customized 24
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credit card and associates a number/code and relevant information/code with 1
the card. The customization may include, for example, a restriction as to 2
type of purchase or as to one-time use” (Ans. 6; FF 7). The fact that Cohen 3
describes various additional features and embodiments that can be 4
incorporated does not detract from the broader teachings thereof which 5
satisfies the recited limitations of claim 16. Moreover, we note that the 6
Appellant’s claims use the open-ended transitional term “comprising” which 7
does not exclude additional, unrecited elements. See Genentech, Inc. v. 8
Chiron Corp., 112 F.3d 495, 501 (Fed. Cir. 2005). 9
Therefore, in view of the above, the Appellant has not shown that the 10
Examiner erred in rejecting claim 16 as anticipated by Cohen (FF 4-9). We 11
further note that the Appellant includes numerous arguments directed to 12
claim 17 under the heading B. 35 U.S.C. §102 Rejections Based on Cohen 13
(App. Br. 25). However, we note that in addition to the 35 U.S.C. § 305 14
rejection already discussed supra, claim 17 stands rejected under 35 U.S.C. 15
§ 103 as obvious over Cohen and Musmanno, not as anticipated by Cohen. 16
Thus, we address these arguments infra. 17
18
Rejection of claims 1, 2, 4-15 and 17 under 35 U.S.C. § 103(a) 19
The Examiner rejected claims 1, 2, 4-15 and 17 under 35 U.S.C. 20
§ 103(a) as unpatentable over Cohen and Musmanno. Independent claim 1 21
is similar to independent claim 16 discussed supra, but recites “defining a 22
plurality of payment categories, at least one of said payment categories 23
including at least two of said purchase authorization for a repeating 24
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transaction at a fixed amount payable at each of a fixed number of time 1
intervals.” 2
The Examiner concedes that Cohen does not describe the limitation 3
directed to a repeating transaction that is recited in independent claim 1 (FF 4
10; Ans. 8) but contends that it would have been obvious to one of ordinary 5
skill in the art to use the method of Cohen to make periodic car and 6
mortgage payments that are inherently disclosed by Musmanno (Ans. 8). 7
Alternatively, the Examiner contends that “it is notoriously well known that 8
the prevalent scheme for making car or mortgage payments involves 9
multiple equal payments at a number of time intervals,” and that it would 10
have been obvious to one of ordinary skill in the art to provide such a 11
payment category because “[t]he desirability for making equal payments 12
would have been readily apparent from the increased convenience of 13
predictability that equal payments provide and from the greater ease in 14
analyzing an account, based upon such a predictability” (Ans. 8). 15
In arguing patentability of independent claims 1 and 17, the Appellant 16
initially relies on the above discussed argument that Cohen fails to describe, 17
teach, or suggest the recited plurality of payment categories, and that 18
Musmanno does not cure this deficiency (App. Br. 27). However, this 19
argument is not persuasive because Cohen does describe the recited payment 20
categories as discussed supra relative to independent claim 16. 21
The Appellant also contends that “Musmanno only deals with 22
management of subaccount features, making sure that subaccounts within 23
the account holder’s parent account are more easily managed with respect to 24
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funding levels. Significantly, however, no restrictions are placed on how the 1
funds are actually spent” (App. Br. 28). The Appellant further argues that 2
mere disclosure of titled mortgage sub-accounts and car payments in 3
Musmanno within the context of account management is not the same as 4
controlling the nature of debits and payments (App. Br. 29). While the 5
Appellant appears to be analyzing the prior art references separately and 6
non-obviousness cannot be established by attacking references individually, 7
we do find the Examiner’s rejection based on the combination of Cohen and 8
Musmanno to be deficient. In re Merck, 800 F.2d 1091, 1097 (Fed. Cir. 9
1986); In re Keller, 642 F.2d 413, 425 (CCPA 1981). 10
In particular, the Examiner has not articulated a rational reason for 11
combining Cohen and Musmanno to result in the invention claimed. The 12
Examiner states that Musmanno describes the desirability of segmenting 13
their account functions into separately managed sub-account areas that 14
includes mortgage and care payment accounts which would “inherently 15
constitute repeating periodic payments payable at fixed amounts” and that 16
“one of ordinary skill in the art would have immediately envisaged equal 17
payments upon reading Musmanno’s reference” (Ans. 8). However, we fail 18
to see how one of ordinary skill would seek to combine Musmanno with 19
Cohen based on Musmanno’s inherent teaching of repeating period 20
payments (Ans. 8), without articulating some other rational basis for 21
combining Musmanno with Cohen. Hence, the Examiner’s articulated 22
reason for combining Musmanno and Cohen is insufficient to support the 23
conclusion of obviousness. In this regard, EXHIBIT G in the record 24
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directed to the analysis of Musmanno and its inapplicability to claim 1 is 1
substantially moot. 2
However, we agree with the Examiner’s alternative basis for the 3
obviousness rejection of independent claims 1 and 17 based on the 4
contention that “it is notoriously well known that the prevalent scheme for 5
making car or mortgage payments involves multiple equal payments at a 6
number of time intervals” (Ans. 8). This contention is not in dispute (Ans. 7
24; Reply Br. 4). The Examiner articulates that it would have been obvious 8
to one of ordinary skill in the art to provide such a payment category in the 9
method described in Cohen because periodic payments in car and mortgage 10
payments is “so prevalent and notorious in the art that one of ordinary skill 11
in the art would have expected[,] and therefore[,] would have found 12
obvious[,] making equal payments for these types of payments . . .” and 13
“[t]he desirability for making equal payments would have been readily 14
apparent from the increased convenience of predictability that equal 15
payments provide” (Ans. 8 and 17). 16
We agree. The Examiner’s articulated reason is rational and sufficient 17
to conclude that including a payment category for a repeating transaction in 18
the method described in Cohen would have been obvious to one of ordinary 19
skill in the art. See KSR, 127 S.Ct. at 1741. In our view, the inclusion of a 20
payment category for a repeating transaction to the payment categories 21
already provided in Cohen (FF 5) is merely a predictable variation that 22
yields a predicable result. Id. at 1739-40. 23
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EXHIBIT B (Available Features of Early Substitute Number Systems 1
Introduced in the United States by Major Credit Issues (in Appeal Brief filed 2
Oct. 19, 2007)) and EXHIBIT G are directed to the fact that various 3
companies attempting to improve security for credit card transactions “did 4
not provide a plurality of predetermined selectable payment categories” 5
(App. Br. 22). However, while such evidence give an indication of the state 6
of the art, it does not detract from the disclosure of Cohen which clearly 7
describes selectable payment categories (FF 5) or persuasively establish that 8
the inclusion of a repeating transaction category into the payment categories 9
of Cohen (FF 5) would have been non-obvious. 10
The Appellant also makes additional arguments relative to 11
independent claim 17 which, similar to independent claim 1, recites the 12
ability to use the transaction code for “at least two purchases for a repeating 13
transaction at a fixed amount payable at each of a fixed number of time 14
intervals.” In particular, the Appellant also contends that Cohen does not 15
describe the limitation “defining a payment category including at least the 16
ability to limit purchases to a single merchant for at least one transaction” as 17
recited in claim 17 because the recited “single merchant” is not the same as 18
the “certain store” parameter described in Cohen (App. Br. 25). The 19
Examiner contends that this claim limitation is satisfied by Cohen’s 20
disclosure of a credit card that is limited for use in a certain store (FF 9; Ans. 21
16). 22
The Appellant argues that “it is the singularity of the merchant in 23
claim 17(c) that defines the limitation, rather than the specific or certain 24
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identity of the merchant itself” (App. Br. 25; emphasis in the Brief). Thus, 1
the Appellant argues that “this feature can limit transactions to a single 2
merchant who is neither known, nor designated in advance” whereas Cohen 3
requires the user to choose the identity of the merchant in advance at the 4
time of customization (App. Br. 25 and 26). 5
While we appreciate the distinction being argued by the Appellant, 6
this argument fails because it is not based on limitations appearing in claim 7
17. In re Am. Acad. of Sci. Tech. Ctr., 367 F.3d at 1364. In particular, claim 8
17 merely requires the capability of limiting purchases “to a single merchant 9
for at least one transaction” without regard to whether the identity of the 10
merchant has been designated or not. Again, during prosecution, claims are 11
to be given their broadest reasonable construction in light of the 12
specification as it would be interpreted by one of ordinary skill in the art, 13
and “[a]bsent claim language carrying a narrow meaning, the PTO should 14
only limit the claim based on the specification or prosecution history when 15
those sources expressly disclaim the broader definition.” In re Self, 671 F.2d 16
at 1348; In re Bigio, 381 F.3d at 1325. For support of the restricted meaning 17
of the limitation “a single merchant”, the Appellant relies on a portion of the 18
‘526 patent which states: 19
The payment category may also include a multi- transaction 20
authorization wherein more than one purchase may be made 21
from one or a plurality of different merchants, each of which 22
may or may not be identified by the customer and pre-coded in 23
association with the transaction code. 24
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(App. Br. 25; col. 8, ll. 11-15). 1
However, a broad and general disclosure such as that cited by the 2
Appellant is not a definition or an express disclaimer of the broader 3
language of the claim. Hence, we agree with the Examiner that this 4
limitation does not distinguish the claimed invention from Cohen (Ans. 16). 5
In view of the above, we conclude that the Appellant has not shown 6
that the Examiner erred in rejecting independent claims 1 and 17 as 7
unpatentable. Dependent claims 2 and 4-15 that ultimately depend from 8
independent claim 1 were not argued separately by the Appellant, and thus, 9
fall with independent claim 1. See 37 C.F.R. 41.37(c)(1)(vii) (2007). 10
11
Rejection of claim 3 under 35 U.S.C. § 103(a) 12
The Examiner rejected claim 3 that depends from independent claim 1 13
under 35 U.S.C. § 103(a) as unpatentable over Cohen, Musmanno and 14
Bernstein. Dependent claim 3 was not argued separately on appeal, and 15
thus, falls with independent claim 1. See In re Nielson, 816 F.2d 1567, 1572 16
(Fed. Cir. 1987). 17
18
CONCLUSIONS 19
1. The Appellant has not shown that the Examiner erred in 20
rejecting claim 17 as enlarging the scope of the ‘526 patent. 21
2. The Appellant has not shown that the Examiner erred in relying 22
on Cohen as prior art under 35 U.S.C. § 102(e) as of the filing date of the 23
provisional application. 24
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3. The Appellant has not shown that Cohen’s utility application 1
was filed too late to claim priority to the provisional application. 2
4. The Appellant has not shown that the Examiner erred in finding 3
that Cohen anticipates claim 16. 4
5. The Appellant has not shown that the Examiner erred in 5
concluding that it would have been obvious to utilize the method of Cohen 6
for a repeating transaction at a fixed payment amount that are payable at a 7
fixed number of time intervals. 8
9
ORDER 10
The Examiner’s rejections of claims 1-17 are AFFIRMED. 11
No time period for taking any subsequent action in connection with 12
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 13
1.136(a)(1)(iv) (2007). 14
15
AFFIRMED 16
ack 17
cc: 18
MALLOY & MALLOY 19
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Third Party Requester: 24
Jeffery G. Killian, Esq. 25
Burns, Doane Swecker & Mathis LLP 26
P.O. 1404 27
Alexandria, VA 22313 28