Ex Parte 7896248 et al

Patent Trial and Appeal Board

Mar 28, 2014

95001620 (P.T.A.B. Mar. 28, 2014)

UNITED STATES PATENT AND TRADEMARKOFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
95/001,620 05/10/2011 7896248 39248-9 1550
120728 7590 03/28/2014
The Law Office of Kirk D. Williams
3196 Dayton St
Denver, CO 80238
EXAMINER
RUBIN, MARGARET R
ART UNIT PAPER NUMBER
3992
MAIL DATE DELIVERY MODE
03/28/2014 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEALS BOARD
____________________

SQUARE, INCORPORATED,
Requester, Respondent, and Cross-Appellant

v.

REM HOLDINGS 3, LLC,
Patent Owner, Appellant, and Cross-Respondent
____________________

Appeal 2013-010534
Reexamination Control Nos. 95/001,620
United States Patent No. 7,896,248 B2
Technology Center 3900
____________________

Before JEFFERY B. ROBERTSON, DENISE M. POTHIER, and
ANDREW J. DILLON, Administrative Patent Judges.

POTHIER, Administrative Patent Judge.

DECISION ON APPEAL
I. STATEMENT OF CASE
Requester, Square Incorporated (hereafter “Requester”) made a third party
request for inter partes reexamination of U.S. Patent No. 7,896,248 B2 (“the 248
patent”) to Robert E. Morley, Jr., entitled Card Reader Device and Method of Use
issued March 1, 2011 and assigned to Rem Holdings 3, LLC.
Appeal 2013-010534
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Patent 7,896,248 B2

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Patent Owner, Rem Holdings 3 LLC (hereafter “Owner”), appeals under
35 U.S.C. §§ 134(b) and 315 (2002) from the decision in the Right of Appeal
Notice (RAN) rejecting claims 1-13 of the 248 patent. Owner App. Br. 6.
Respondent filed a Respondent Brief disputing the contentions by Owner and
supporting the Examiner’s decision. Requester Resp. Br. 8-22.
Requester cross-appeals from the Examiner’s decision not to maintain
specific rejections and to confirm claims 14-20 in the RAN. Requester App. Br. 8-
26. Owner filed a Respondent Brief opposing the cross-appeal and supporting the
Examiner’s decision not to maintain certain rejections. Owner Resp. Br. 16-22.
Owner and Requester each filed a Rebuttal Brief. Owner and Requester
Reb. Br.
The Examiner’s Answer relies on the RAN, incorporating it by reference.
Ans. 1.
An oral hearing was conducted on January 8, 2014. The transcript of the
oral hearing will be made of record in due course.
Owner identifies a related reexamination of U.S. Patent No. 7,810,729 B2,
of which the application resulting in the 248 Patent claims to be a continuation-in-
part, and which has been assigned Reexamination Control No. 95/001,618. Owner
App. Br. 5. Reexamination Control No. 95/001,618 is also on appeal and has been
assigned Appeal No. 2013-009801.
We are informed also that the 248 Patent is involved in pending litigation,
styled Square, Inc. and James McKelvey v. Rem Holdings 3, LLC, Civil Action No.
4:10-cv-2243 SNLJ, which is before the U.S. District Court for the Eastern District
of Missouri and has been stayed pending the outcome of this reexamination
proceeding. Owner App. Br. 5.
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Patent 7,896,248 B2

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We have jurisdiction under 35 U.S.C. §§ 134(b) and 315.
With respect to Owner’s appeal, we AFFIRM the adopted rejections of
claims 1-13.
With respect to Requester’s Cross-Appeal, we REVERSE the Examiner’s
decision not to maintain a rejection, designating our reversal as a new ground of
rejection for claims 14-20 pursuant to 37 C.F.R. § 41.77(b).
Illustrative claim 1 on appeal reads as follows:
1. A card reader device for reading a card having data stored on a magnetic
stripe incorporated into the card the device comprising:
a read head for passing a magnetic stripe of a card by to read data stored
on a magnetic stripe and for producing a signal indicative of data stored on a
magnetic stripe;
a signal setting device for setting an amplitude of the signal indicative of
data stored on a magnetic stripe; and
an output plug adapted to be inserted into a headset jack associated with a
host device for providing the signal indicative of data stored on a magnetic
stripe to a host device.

Owner App. Br., Claims App’x 60.

A. Prior Art Relied Upon
The Examiner relies on the following as evidence of unpatentability:
Wood US 2004/0012875 A1 Jan. 22, 2004
Von Mueller
(“Von Mueller I”)
US 2005/0247787 A1 Nov. 10, 2005
Gullickson US 2006/0094481 A1 May 4, 2006
Antonio US 2006/0223580 A1 Oct. 5, 2006

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Patent 7,896,248 B2

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Reading magnetic cards (almost) for free 1-21 (January 26, 2009), available at
http://lekernel.net/blog/2009/01/reading-magnetic-cards-almost-for-free
(“Lekernel”).

Luis Padilla Visdómine, Turning Your Mobile Into a Magnetic Stripe Reader 1-42
(2007), available at http://classic-
web.archive.org/web/20041027001715/http://www.gae.ucm.es/~padilla/extrawork/
mobilesoundtrack.html (“Padilla I”).

B. The Adopted Rejections
Because the Examiner’s Answer incorporates the RAN by reference (Ans.
1), we will refer to the RAN. The Examiner maintains the following rejections:
Reference(s) Basis Claims Presented
Lekernel § 103(a) 1-3 and 5 RAN 5-8
Lekernel and Gullickson § 103(a) 4 RAN 8
Von Mueller I, Antonio,
and Padilla I § 103(a) 1-3 and 6 RAN 9-13
Von Mueller I, Antonio,
Padilla I, and Gullickson § 103(a) 4 RAN 13-14
Von Mueller I, Antonio,
Padilla I, and Draeger or
Wood
§ 103(a) 7-13 RAN 14-19

1 Two printed pages of this reference were provided, and these page numbers
correspond sequentially to the pages provided.
2 Four printed pages of this reference were provided, and these page numbers
correspond sequentially to the pages provided.
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C. Rejections Not Adopted or Withdrawn
The Examiner does not adopt or has withdrawn the following rejections:
Reference(s) Basis Claims Last Presented
Wood, Odagiri
(US 2004/0041911 A1),
and Antonio
§ 103(a) 14-20
Action
Closing
Prosecution
(ACP) 6-7
Von Mueller I and
Odagiri § 103(a) 14-20
Request 22-
29

Requester App. Br. 6.

II. ISSUES ON APPEAL
Owner and Requester raise the following issues of whether the Examiner
erred in finding that:
(1) Lekernel qualifies as prior art?
(2) Lekernel teaches “a signal setting device for setting an amplitude of the
signal indicative of data stored on a magnetic stripe” found in claims 1 and 7?
(3) von Mueller Il teaches “a signal setting device for setting an amplitude
of the signal indicative of data stored on a magnetic stripe” found in claims 1 and
7?
(4) One of ordinary skill in the art would have combined the teachings of
von Mueller I, Antonio, and Padilla I?
(5) the secondary considerations fail to weigh against obviousness?
(6) claims 14-20 are confirmed?

Appeal 2013-010534
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Patent 7,896,248 B2

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III. ANALYSIS
A. Preliminary Matters
i. Petition
On January 6, 2014, Owner filed a petition to expunge certain information
from the record. The Office granted the petition on February 19, 2014. We will
confine our opinion to the contentions presented in the briefs. See 37 C.F.R.
§ 41.67(c)(1)(vii).
ii. Lekernel Qualifies as Prior Art
The Examiner relies on Lekernel in formulating art rejections for claims 1-5.
RAN 5-8. Owner argues that Lekernel is not prior art. Owner App. Br. 11, 21-23.
In particular, Owner contends that the actual date that Lekernel was posted is
unclear from the record. Owner App. Br. 21; Owner Reb. Br. 27-28.
The 248 patent issued from Application No. 12/657,792 filed January 27,
2010 and claims priority to Application No. 12/456,134, filed June 10, 2009 as a
continuation-in-part. To qualify as prior art, Lekernel must be published at least
prior to January 27, 2010 and earlier than June 10, 2009 for subject matter that has
written description support back to the June 2009 filing date.3
We find sufficient evidence in the record that Lekernel was posted and
publicly available by January 26, 2009. Lekernel states that “[t]his entry was
posted on January 26, 2009, 4:26 pm and is filed under Howto’s, Misc projects.”
Lekernel 2; see also February 23, 2012 Requester’s Comments 2, 5. Additionally,
contrary to Owner’s assertion (Owner App. Br. 23), Lekernel has a Uniform

3 As the Examiner notes (ACP 27), it is not necessary to establish that Lekernel has
a publication date of November 26, 2007 in order for Lekernel to qualify as prior
art. Any arguments concerning the publication date of November 26, 2007 for
Lekernel will not be addressed further. Owner App. Br. 21.
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Resource Locator (URL), http://lekernel.net/blog/2009/01/reading-magnetic-cards-
almost-for-free. Lekernel 1. Notably, this URL includes a date, January 2009
(“2009/01”), and this particular URL was addressed by Requester in its February
23, 2012 Comments. See February 23, 2012 Requester’s Comments 2 (noting the
above URL address).4
We do not find Owner’s evidence to the contrary persuasive. First, the
Examiner notes that the declaration of Christopher Butler discussed by Owner in
disputing the January 26, 2009 publication date is defective, because it fails to
comply with 37 C.F.R. § 1.68. ACP 26; see also November 23, 2011 Non-Final
Rej. 23. Second, any differences in the URLs at different times discussed in the
Owner’s January 26, 2012 Response at page five fails to rebut whether the January
26, 2009 posting contains the subject matter for which the Examiner relied upon
Lekernel. Owner App. Br. 21. Importantly, the Examiner notes that “[t]he subject
matter relied upon [within Lekernel] has not changed . . . .” ACP 25; see also
February 23, 2012 Requester’s Comments 3-4 (referring to Exhibit B).
Given the above, we find sufficient evidence that Lekernel was posted and
publicly available as of January 2009. We therefore accept the January 2009
publication date (ACP 27) and find that Lekernel qualifies prior art.

4 Lekernel also indicates that the blog archives its postings by date. See Lekernel
1-2 “ARCHIVES” and the “January 2009” link to the right of the posting. Visiting
the blog, http://lekernel.net/blog, and navigating through the “January 2009” link
within the archives, one can locate Lekernel. For example, one can select the
“January 2009” link on the right and then select “Older entries” on the bottom to
locate Lekernel on page 2. Alternatively, one can select the “January 2009” link
on the right, “HOWTO’S” on the right, and “Older entries” on the bottom of each
page to located Lekernel on page 3.
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B. Claim Construction
As Requester notes (see Requester Resp. Br. 11), Owner argues for the first
time in the Appeal Brief that the recitation, “a signal setting device for setting an
amplitude of the signal indicative of data stored on a magnetic stripe” found in
claims 1, 7, and 14, invokes 35 U.S.C. § 112, sixth paragraph. Owner App.
Br. 14-19. Owner specifically asserts that the Examiner erred in failing to construe
this recitation as a means-plus-function limitation. Id.
The failure to use the word “means” creates a strong rebuttable presumption
that the drafter did not intend a claim to be governed by § 112, sixth paragraph.
See Flo Healthcare Solutions, LLC v. Kappos, 697 F.3d 1367, 1373-74 (Fed. Cir.
2012). In particular, 35 U.S.C. § 112, sixth paragraph has been determined not to
be invoked when the drafter has failed to signal the intent to apply the provision.
See id. at 1374. Until the filing of the Appeal Brief, Owner did not signal any
intent to apply 35 U.S.C. § 112, sixth paragraph to the phrase, “a signal setting
device for setting an amplitude of the signal . . . .”
Even so, generic terms, such as “device for . . ,” may invoke 35 U.S.C.
§ 112, sixth paragraph when the phrase is considered a non-structural term that is
not modified by sufficient structure. See Welker Bearing Co., v. PHD, Inc., 550
F.3d 1090, 1096 (Fed. Cir. 2008). A limitation lacking the term, “means” may
overcome a presumption that 35 U.S.C. § 112, sixth paragraph is not invoked by
showing that “the claim term fails to recite sufficiently definite structure or else
recites function without reciting sufficient structure for permitting that function.”
See Flo Healthcare, 697 F.3d at 1374. Owner makes this precise contention.
Owner App. Br. 14-15; Owner Resp. Br. 10-15; Owner Reb. Br. 5-17.
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Owner argues the phrase, “signal setting device” is an undefined term in the
electrical arts and that the phrase, “a signal setting device for setting amplitude of
the signal indicative of data stored on a magnetic stripe,” describes insufficient
structure for performing the recited function. Owner App. Br. 14-15.
Accordingly, Owner asserts the structure corresponding to the purported means-
plus-function limitation is “a resistance coupled to the output plug” (Owner App.
Br. 17) that passively attenuates the signal without using power. See id. at 16-19
and Owner Reb. Br. 6. Given this understanding, Owner contends that the recited
“signal setting device for setting an amplitude of the signal . . .” excludes an
amplifier. Owner App. Br. 18; Owner Reb. Br. 5-8. Requester disagrees, asserting
the limitation does not invoke § 112, sixth paragraph, and recites sufficient
structure that includes an amplifier. Requester Resp. Br. 10-11.
Assuming 35 U.S.C. § 112, sixth paragraph has been invoked for the recited
“signal setting device for setting an amplitude,”, we find both a resistor and an
amplifier are corresponding structures to this recitation when considering the 248
patent’s disclosure as interpreted by an ordinarily skilled artisan. See In re
Donaldson Co., Inc., 16 F.3d 1189, 1193 (Fed. Cir. 1994) (en banc). Notably, the
precise function in claims 1 and 7 is “setting an amplitude of the signal indicative
of data stored on a magnetic stripe.” There is no restriction that the signal’s
amplitude is set by attenuating the signal passively or without using power. See
Requester Resp. Br. 12-13.
When considering the structure in the 248 patent’s disclosure that performs
the function of “setting an amplitude of the signal,” the 248 patent discusses “a
signal setting device for setting amplitude of the signal indicative of data stored on
a magnetic stripe” in several places. The 248 patent describes “a signal amplitude
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setting device 26[,] such as resistor which is connected to jack 16,” “resistor 26
with the resistor setting the amplitude of the waveform,” and “[t]he resistor 26 sets
the amplitude of this signal and this signal is provided to the cell phone 20.” The
248 patent 4:43-44, 61-62, 5:20-21; Fig. 2. The 248 patent therefore includes a
resistor as an example of the structure that performs the function of “setting an
amplitude of the signal[.]”
The 248 patent describes another embodiment where “[t]he resistor 166 or
other circuitry for setting the amplitude is required to control the amplitude of the
signal because without the resistor 166 the signal being sent to the [integrated
circuit] IC 168 may not be within an acceptable amplitude for the IC 168.” The
248 patent 7:32-36; Fig. 7. This passage refers to something other than a resistor
(i.e., “other circuitry”) that is used to “for setting the amplitude,” indicating Owner
contemplated circuitry other than a resistor to perform this function. See Requester
Resp. Br. 11.
Owner contends that the “other circuitry” is a resistance that must include a
resistor (e.g., a resistance network) and excludes amplifiers. Owner’s Reb. Br. 7-9.
We disagree. See Ans. 6-7. We acknowledge the portion of the 248 patent
describing the “other circuitry” states in its entirety “[t]he resistor 166 or other
circuitry for setting the amplitude is required to control the amplitude of the signal
because without the resistor 166 the signal being sent to the IC 168 may not be
within an acceptable amplitude for the IC 168.” The 248 patent 7:32-35. Yet, we
find the sentence describes the “other circuitry” as an alternative to the resistor
(i.e., “resistor or other circuitry”) for setting an amplitude. Owner thus
contemplates an alternative circuitry within its disclosure used to set the amplitude
that differs from a resistor or resistance.
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To further support the position that the 248 patent describes other structures
to perform the function of setting signal amplitude, the 248 patent discusses
another embodiment in Figure 3 devoid of any resistor. The 248 patent 3:63-64,
5:47-67; Fig. 3. Owner states this embodiment uses an amplifier “in place of the
‘signal setting device for setting . . .’ of FIG. 2.” Owner Resp. Br. 15. In this
embodiment, card reader device 80 has coil 86 to read the data stored on the
magnetic stripe and to produce a waveform indicative of the signal (i.e., the “read
head . . . for producing a signal indicative of data stored on a magnetic stripe[.]”)
The 248 patent 5:58-60; Fig. 3. The signal is then amplified using amplifier 88 and
transmitted to a cell phone or other device through jack 90.5 The 248 patent 5:48-
54, 60-62; Fig. 3. Amplifier 88 thus adjusts or sets the signal’s amplitude prior to
transmitting the signal to a cell phone or other device (e.g., a host device). See
Ans. 6, 10; see also Requester Resp. Br. 12.
The phrase, “signal setting” is not used in the 248 patent when describing
the Figure 3 embodiment and the symbols for resistor and amplifier are different.
Owner Resp. Br. 15. Yet, amplifier 88 still performs the function of “setting an
amplitude” as recited in independent claims 1, 7, and 14. See Ans. 6. The
Examiner states that an ordinary skilled artisan would have recognized that a
resistor generally sets amplitude through attenuation, while an amplifier generally,
but not always sets amplitude through amplification. See Ans. 6-10; see also
Requester Resp. Br. 12-13. We agree. Although these devices set amplitude
differently, they both perform the recited function of “setting an amplitude of the
signal . . .” as broadly as recited and as one skilled in the art would interpret in
light of the disclosure. We therefore find that the 248 patent describes a second

5 We presume the reference to “jack 88” in line 61 is a typographical error.
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structure (i.e., an amplifier) that one skilled in the art would have understood as
corresponding to the recited “signal setting device for setting an amplitude . . .” in
claims 1, 7, and 14.
Owner contends that one skilled in the art would interpret the phrase, “signal
setting device for setting an amplitude of the signal . . .” in the 248 patent to be
restricted to a resistance. Owner Resp. Br. 13-14; Owner’s Reb. Br. 5-6. For
example, Owner presents a declaration of Stephen R. Wood (“the Wood
declaration”) and a supplemental declaration of Robert E. Morley, Jr., Ph.D.6 to
support that one skilled in the art would understand that a “signal setting device for
setting an amplitude of the signal” is only a resistance that passively attenuates a
signal. See Owner Resp. Br., Evidence App’x, Exs. 1, ¶¶ 7-8 and Ex. 2, ¶ 7.
Requester presents a competing declaration by David A. Thompson dated
September 29, 2011 (“the first Thompson declaration”)7 supporting the position
that an ordinarily skilled artisan would have understood “a signal setting device for
setting an amplitude of the signal” to include more than a device that attenuates

6 Owner presents three declarations by Robert E. Morley, Jr. In the Owner’s
Appeal Brief, two Morley declarations are submitted as Exhibit 1 dated September
1, 2011 (“the Morley declaration”) and Exhibit 18 dated January 23, 2012 (“the
first supplemental Morley declaration”). These are relabeled as Exhibits 4 and 3
respectively in the Owner’s Respondent Brief. For consistency and clarity, we will
refer to these declarations using the exhibit numbers in the Owner’s Appeal Brief.
The third declaration dated December 20, 2012 (“the second supplemental
declaration”) is Exhibit 2 in the Owner’s Respondent Brief and in the Owner’s
Rebuttal Brief. For consistency and clarity, we will refer to this declaration using
the exhibit numbers in the Owner’s Respondent Brief.
7 Requester filed two declarations from David A. Thompson in the Requester’s
Appeal Brief. The first Thompson declaration is Exhibit 1. The second
declaration (“the second Thompson declaration”) is dated September 4, 2012 and
is Exhibit 2.
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(e.g., a resistor) and includes both resistors and amplifiers. Requester App. Br.,
Evidence App’x, Ex. 1, ¶ 38.
We are not persuaded by Owner’s declaration evidence. As noted above, the
recited function in claim 1 is that of “setting an amplitude of the signal” – not
setting an amplitude of a signal by passively attenuating. Both the Wood
declaration and the second supplemental Morley declaration do not account for
devices that set amplitude but rather only those that set an amplitude using passive
attenuation, which is not claimed. On the other hand, we find the first Thompson
declaration more persuasive, because the declaration does not unduly limit claim 1
to devices that set an amplitude only through passive attenuation and also
addresses what an ordinarily skilled in the art would have understood a “signal
setting device for setting an amplitude of the signal” to be in light of the 248
patent’s disclosure. See Requester App. Br., Evidence App’x, Ex. 1 ¶¶ 9, 37-38.
The Examiner takes a similar position. See Ans. 5-10.
Alternatively assuming 35 U.S.C. § 112, sixth paragraph has not been
invoked, we find that one skilled in the art would have understood that the
structures in the 248 patent’s disclosure described as the “signal setting device for
setting an amplitude of the signal . . .” recited in independent claims 1, 7, and 14
include resistors and amplifiers under the broadest reasonable construction
standard set forth in In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed.
Cir. 2004. We refer to the above discussion for support. With this understanding,
we turn to the art rejections.

C. Art Rejections
The “obviousness inquiry centers on whether ‘the claimed invention as a
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whole’ would have been obvious . . . .” Rambus Inc. v. Rea, 731 F.3d 1248, 1257-
58 (Fed. Cir. 2013). 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) 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 406-07. Additionally, “[t]he obviousness assessment depends on
what the prior art teaches and on what the non-prior-art evidence of ‘secondary
considerations’ (or objective indicia) may indicate about whether the invention
would have been obvious at the relevant time.” See Institut Pasteur and Universite
Pierre et Marie Curie v. Focarino and Precision Biosciences, Inc., 738 F.3d 1337,
1344 (Fed. Cir. 2013) (citing KSR, 550 U.S. at 406-07).
The evidentiary standard for findings in proceedings before the United
States Patent Office is preponderance of the evidence. Ethicon, Inc. v. Quigg, 849
F.2d 1422, 1427 (Fed. Cir. 1988).

1. Lekernel under § 103
a. Claims 1-3 and 5
We select independent claim 1 as representative and group claims 2 and 3,
not separately argued, with claim 1. Owner contends Lekernel fails to teach the
recited “signal setting device for setting an amplitude of the signal . . .” in claim 1.
Owner App. Br. 19-20; Owner Reb. Br. 28. In particular, Owner argues that
Lekernel’s amplifier amplifies a signal and requires power, in contrast with a
resistor that reduces the amplitude without using power. Id. We are not
persuaded.
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The adopted rejection maps the “signal setting device” in Lekernel to a
circuit that amplifies the signal. See Lekernel 1; RAN 5 (incorporating Request 6-
8, App. A, pp. 1-3). Given our above claim construction, this circuit sets an
amplitude by adjusting the signal through amplification, and thus, includes “a
signal setting device for setting an amplitude of the signal . . . .” See Requester
Resp. Br. 15-16. We additionally are not persuaded that claim requires that
Lekernel set the amplitude of the signal without using power. Id.
Notably, Lekernel’s circuit for amplifying the signal includes resistors.
Lekernel 1; RAN 5 (incorporating Request, App. A, p. 3). Requester notes this
fact. See Requester Resp. Br. 15 (stating “[s]ignificantly, the Lekernel amplifier
circuit includes resistors.”) Thus, even assuming the claim construction of the
“signal setting device” was restricted to resistors, Lekernel discloses a circuit that
includes an internal resistance for the microphone input as well as a 120k Ohm and
15 k Ohm resistors. Lekernel 1; amplifier circuit figure.
Owner acknowledges these resistors but argues that they do not reduce the
amplitude of the read head signal. Owner App. Br. 20. Once again, we note that
claim 1 does not recite “a signal setting device for” reducing amplitude but rather
setting amplitude. Also during oral hearing, Owner acknowledged that there
would be some resistive component in the connection between a read head and a
microphone input of a mobile phone. See Oral H’g 27-28. Additionally, Lekernel
need not state explicitly that its resistors or amplifier circuit sets the amplitude of
the signal. That is, identical terminology between Lekernel and claimed limitation
is not required to teach the “signal setting device for setting an amplitude of the
signal . . . .” See In re Bond, 910 F.2d 831, 832 (Fed. Cir. 1990).
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Lastly, Owner for the first time in the Rebuttal Brief and after Requester
filed its Rebuttal Brief argues that the Examiner did not properly consider the
“headset jack” limitation recited in the claims. Owner Reb. Br. 28-30. This
argument is untimely and waived. See Ex parte Borden, 93 U.S.P.Q.2d 1473, 1474
(BPAI 2010) (informative).
Concerning claim 5, the claim recites “the signal indicative of data stored on
the magnetic stripe is an analog signal.” The Examiner adopts the Requester’s
position, which is that the signals from a magnetic stripe read from a read head
would have been recognized as being analog based on the circuit diagram.
RAN 5-6 (referring to Request 6-8, App. B 7). Owner argues Lekernel fails to
teach claim 5, because Lekernel states the circuit reads 0’s and 1’s. Owner App.
Br. 25 (citing Lekernel 1); Owner Reb. Br. 30. Requester asserts that there is no
discussion in Lekernel that the card reader circuit converts an analog signal to a
digital signal. Requester Resp. Br. 16. Requester also contends that Lekernel’s
reference to “0’s” and “1’s” is a discussion that the signal will eventually be
digitized. Id. (citing Request, App. B and the 248 patent 4:64-67)
On balance, we agree with Requester. Lekernel discloses that the magnetic
read head used to read information from a magnetic card is scavenged from a
cassette player. Lekernel 1. Given that the read head is disclosed as scavenged
from a cassette player and is not specified as a digital audio cassette player, we
agree with Requester that an ordinarily skilled artisan would have recognized and
understood this type of read head reads information and creates analog signals.
See Request 6-8, App. B 7. Additionally, as the Requester notes (Requester Resp.
Br. 16), Lekernel’s circuitry does not show or suggest an analog to digital
converter (ADC) and has similar circuitry to Figure 2 in the 248 patent, which
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includes an ADC only in the cell phone. Compare the 248 patent’s Fig. 2 with
Lekernel’s amplifier circuit. Thus, notwithstanding Lekernel’s reference to
reading 0s and 1s, we find that the Examiner’s conclusion reasonable that the
signal indicative of the data stored on the magnetic stripe and produced by the read
head in Lekernel is analog.

b. Claim 4
Claim 4 is rejected based on Lekernel and Gullickson under § 103. RAN 8
(referring to App. A and C). Owner relies on the arguments made for claim 1 and
asserts neither Lekernel nor Gullickson teaches or suggests the recited signal
setting device. Owner App. Br. 26. We are not persuaded for the reasons
previously set forth when addressing Lekernel.

2. von Mueller I, Antonio, and Padilla I under § 103
a. Claims 1-3 and 6
We select claim 1 as representative and group claims 2, 3, and 6, not
separately argued, with claim 1. The Examiner concludes that independent claim 1
would have been obvious over the combination of von Mueller I, Antonio, and
Padilla I. RAN 9-13 (incorporating the Request, App. D). Owner asserts that the
amplifier disclosed in von Mueller I is not a “signal setting device” as recited in
claim 1. Owner App. Br. 35-37; Owner Reb. Br. 33. Requester argues that
Owner’s interpretation of the claims is too narrow. Requester Resp. Br. 19. We
agree with Requester for the same reasons discussed in the above section entitled
“Claim Construction.” That is, von Mueller I, just like Lekernel, teaches an
amplifier, which is “a signal setting device for setting an amplitude.” Additionally,
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like Lekernel, von Mueller I teaches the circuit includes resistors. See RAN 9
(referring to Request, App. D 11-12 (citing von Mueller I ¶ 38, Fig. 8)). For the
reasons discussed above when interpreting the “signal setting device for setting an
amplitude of the signal . . .,” we equally find that von Mueller I teaches a signal
setting device for setting an amplitude as recited in claim 1.
Additionally, Owner contends there is no motivation to modify von Mueller
I as proposed, because von Mueller I is designed such that no data communication
can take place between the card reader and the personal data assistant (PDA) when
data is being transferred between the PDA and a personal computer (PC) (i.e.,
when “hot syncing.”) Owner App. Br. 27-34. Owner particularly emphasizes von
Mueller I’s discussion that data cannot be transferred between a card reader and a
PDA during hot syncing and asserts the proposed combination does not solve how
to transfer data to the PDA from the card reader during hot syncing. Owner App.
Br. 28-29 (citing von Mueller I ¶ 37), 30. We are not persuaded that these
statements in von Mueller I fail to provide a reason to combine Antonio’s and
Padilla’s teachings with von Mueller I.
Rather, as Requester and the Examiner indicate, the restriction in von
Mueller I of not providing data transfer between the card reader and the PDA
during hot syncing provides a precise reason with some rational underpinning to
combine Antonio and Padilla I with von Mueller I. RAN 9-12; Requester Resp.
Br. 17-19. That is, Antonio’s and Padilla I’s teaching provide the von Mueller
I/Antonio/Padilla I system the ability to transfer data during hot syncing between
the card reader and the PDA through another, additional input widely used with
portable device. RAN 9-13. Also, we agree with the Examiner’s reasoning that
“the ubiquitous presence of mobile devices makes them ideal input devices as
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pointed out by Antonio and using the earphone/microphone inputs provided [in
these mobile devices] allows convenience and flexibility in collecting and
processing data.” RAN 9-10.
Owner argues that von Mueller I already solves this problem by storing data
for later retrieval. Owner App. Br. 31-33. Owner asserts that there is no need for
simultaneously communication, because one can use the card reader when the
device is not hot syncing. Owner Reb. Br. 33. We disagree. The proposed
modification would have improved on von Mueller I’s techniques and provides a
reason for obviousness. See KSR Int’l Co v. Teleflex Inc., 550 U.S. 398, 417
(2007). Also, von Muller I does not criticize, discredit, or otherwise discourage the
solution of permitting simultaneous communication between the PDA and PC as
well as between a PDA and card reader.
Owner further asserts that the proposed combination would rendered von
Mueller I inoperable, would change the device’s principle of operation from one
that does not transfer data during hot syncing to one that does, and would require
significant changes. Owner App. Br. 27-31. First, we note that bodily
incorporation of features into von Mueller I is not required. See In re Keller, 642
F.2d 413, 425 (CCPA 1981). Second, as stated above, the Examiner has not
proposed a substitution of one element for another. Owner Reb. Br. 31-32. Third,
we disagree that von Mueller I’s principle of operation is to stop data from
transferring between the PDA and the card reader during hot syncing. Rather, von
Mueller I operates to communicate data between the PDA and other devices.
We further agree with Requester that the combination of teachings results
in a device with components having the same functions and yields a predictable
result. See Respondent Resp. Br. 17. That is, von Mueller I’s connection (i.e., the
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serial port) will still permit normal serial communications between PC and PDA
and prevent other data for being sent through this connection during hot syncing.
The additional, second connection, as suggested by Antonio and Padilla I, and as
explained above, provides for improved data communication techniques by permit
contemporaneous data communication between the card reader and the PDA
during hot syncing. See Requester Resp. Br. 17-19. Thus, the Examiner’s
reasoning is sufficiently supported by the references. As a result, we disagree with
Owner that the Examiner is using impermissible hindsight in formulating the
obviousness rejection. Owner App. Br. 32-34.

b. Claim 4
Claim 4 is rejected based on von Mueller I, Antonio, Padilla I, and
Gullickson under § 103. RAN 13-14. Owner relies on the arguments made for
claim 1 and asserts none of the cited references teaches or suggests the signal
setting device. Owner App. Br. 37. We are not persuaded for the reasons
previously set forth when addressing von Mueller I, Antonio, and Padilla I.

3. von Mueller I, Antonio, Padilla, and Draeger or Wood under § 103
The Examiner also concluded that the combination of von Mueller I,
Antonio, Padilla I, and Draeger or Wood renders independent claim 7 obvious.
RAN 14-19 (referring to Request, App. D). Owner refers to the arguments
previously presented “in Sections 3 and 4” for this rejection (Owner App. Br. 37)
and repeats the same arguments (id. at 38-41). We are not persuaded for the
above-stated reasons. We additionally repeat that the rejection maps the “signal
setting device for setting an amplitude of the signal . . .” to the amplifier circuit in
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von Mueller I’s Figure 8 (Request, App. D 11-12), which includes both an
amplifier and resistor elements. Von Mueller I ¶ 38; Fig. 8.
Claims 8-13 are not separately argued and are grouped with representative
claim 7.

4. Consideration of Secondary Evidence in Determining Obviousness
Having considered the evidence supporting a conclusion of obviousness, we
now turn to the arguments concerning objective evidence of nonobviousness.
Owner asserts that uncontroverted objective evidence, including evidence of
copying and commercial success, has been provided to weigh against the
obviousness of the claims in the 248 patent. Owner App. Br. 41-58. Requester
takes the opposing position, asserting Requester did not copy the invention and that
the evidence fails to provide a sufficient nexus between the claimed invention and
the Requester’s commercial success. Requester Resp. Br. 19-22. Requester asserts
the success of the product is due to other “factors beyond the card reader”
(Requester Resp. Br. 20), including its transaction platform that includes software
components, services provided beyond the card reader, and the fact that the card
reader is free. Id. at 20-22.
At the outset, we disagree with Owner that the Examiner has not considered
the submitted evidence in the record in arriving at the conclusion that claims 1-13
are obvious. See Owner App. Br. 41, 43. The ACP specifically discusses the
evidence over several pages. See ACP 37-42. The Examiner stresses, in
particular, that the presented evidence of secondary considerations is not sufficient
to overcome the obviousness rejections because “the evidence for maintaining the
rejections that are in place is stronger than the presented evidence regarding
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secondary considerations.” ACP 37; see Newell Cos. v. Kenney Mfg. Co., 864 F.2d
757, 768-69 (Fed. Cir. 1988). We agree with the Examiner.
The evidence presented by Owner falls into three general categories: (1)
copying by Requester, Roam Data, and others of the claimed invention (Owner
App. Br. 44, 48-51); (2) commercial success of Requester’s and Roam Data’s
readers (Owner App. Br. 44, 51-57); and (3) other considerations (Owner App. Br.
41, 44, 57-58).

A. Copying by Requester, Roam Data, and Others
Owner first discusses Exhibits 1 and 18 (the Morley declaration and the first
supplemental Morley declaration), asserting that these declarations demonstrate
that the Requester’s reader has the claimed features recited in claims 1 through 6
and the Roam Data reader has the claimed features of recited claims 7 and 14.
Owner App. Br. 47-51, 56, Evidence App’x, Ex. 1, ¶¶ 2, 9-16, 47-49, and Ex. 18,
¶¶ 2, 6-9, 32, 36. Specifically, Mr. Robert Morley contends that Mr. James
McKelvey, a founder at Square, approach him in February 2009 with an idea of
processing credit cards using an iPhone as a host device by taking a picture of the
card. Between February and the fall of 2009, Mr. Morley further asserts that he
designed a card reader that uses a headset jack’s microphone input to send a signal
indicative of the card’s data and included the features in claims 1 through 6.
Owner App. Br., Evidence App’x, Ex. 1, ¶¶ 9-13, 16. Requester provides a
different story contending that Mssrs. Morley and McKelvey collaborated and are
co-inventors of the claimed invention. See Requester Resp. Br. 22.
Contrary to Owner’s contentions, the Examiner considered this evidence.
See ACP 40-41. Specifically, the Examiner finds evidence that Requester’s reader
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has the features in the claim but concludes that the evidence does not show
necessarily that the features were copied from the 248 patent. See id. (discussing
the first supplemental Morley declaration). As Requester indicates (Requester
Resp. Br. 22), the evidence, such as the first supplemental Morley declaration
(Owner App. Br., Evidence App’x, Ex. 18, ¶¶ 6-9, 32-33), fails to show that the
features could have been included within the Requester’s reader by some other
attributable factors, such as a general lack of concern for patent property, which
weighs neither for nor against the nonobviousness of a specific patent. See Cable
Elec. Prods. Inc. v. Genmark Inc., 770 F.2d 1015, 1028 (Fed. Cir. 1985) overruled
on other grounds by Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356,
1358-61 (Fed. Cir. 1999)(en banc). This similarly applies to the card readers of
Roam Data and other company discussed by Owner.
Contrary to Owner’s contentions, we find evidence in the record to rebut the
Morley declarations. See Owner App. Br. 49-50; Owner Reb. Br. 25-26. The
Examiner discusses the conflicting versions of what occurred between Mssrs.
Morley and McKelvey. ACP 40 (referring to Exhibit 248 in Owner’s Appeal
Brief). That is, the record includes a complaint asserting that Mssrs. Morley and
McKelvey are co-inventors. Owner further asserts that the 248 patent issued to
Mr. Morley, creating a presumption that he is the sole inventor. See Owner Reb.
Br. 25. However, Mr. McKelvey sent an email to Mr. Morley on April 23, 2009,
stating that “[Dr. Morley] figured out a way to both simplify the circuit AND

8 Exhibits 1-31 in the Owner’s Appeal Brief also may contain letter labels. At
times, in the record, the Examiner and Owner refer to the exhibits by their letter
label. For example, Exhibit 24 is also discussed and as labeled Exhibit V. ACP
40. For consistency and clarify, we will refer to the exhibits in this opinion by the
numbers listed in the Evidence Appendix of the Owner’s Appeal Brief.
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amplify the signal.” Owner App. Br. 49, Evidence App’x, Ex. 25. We note that
the email does not provide sufficient detail to ascertain whether “simplify[ing] the
circuit” includes the recited “signal setting device.” This email and the June 10,
2009 email also provide evidence that Mssrs. Morley and McKelvey were
collaborating on the claimed invention that became part of a card reader patent
application. Owner App. Br., Evidence App’x, Exs. 21 and 25.
In view of the above, we agree with the Examiner, that the provided
evidence of copying is insufficient to outweigh the obviousness rejection. See
ACP 40-41.

B. Commercial Success of Requester and Other Card Readers
Owner argues the overwhelming objective evidence establishes a nexus
between the claimed invention and the commercial success of Requester’s reader.
Owner App. Br. 51-57. The Examiner, on the other hand, states Owner has not
presented a convincing nexus between the secondary considerations (i.e.,
commercial success) and the claimed invention. ACP 38, 41-42. Requester also
contends that the evidence does not provide the requisite nexus. Requester Resp.
Br. 20-22.
Owner asserts that the commercial success evidence includes 800,000 card
readers embodying the invention in claims 1 through 6 were sold by Requester in a
twelve-month period and were offered for sale at 10,000 retail outlets. Owner
App. Br. 51-52, 54 (referring to Evidence App’x, Exs. 19 and 27). Owner states
that over one million merchants were using Requester’s card reader embodying the
invention in claims 1 through 6 to accept credit card payments and payments over
two billion dollars and, two months later, four billion dollars annually were being
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processed using the readers embodying the invention in claims 1 through 6.
Owner App. Br. 52, 54 (referring to Evidence App’x, Exs. 19, 23, and 27). Owner
further contends that Roam Data has shipped approximately 300,000 readers that
embodied the invention in claims 7-20. Owner App. Br. 53, 56 (citing Evidence
App’x, Ex. 13).
Contrary to Owner’s contentions, the Examiner considered this evidence and
concluded it did not outweigh the obviousness rejection. See ACP 39, 41-42.
Notably, “evidence related solely to the number of units sold provides a very weak
showing of commercial success, if any[,]” because such evidence provides no
indication of whether these sales are substantial with respect to the market. In re
Huang, 100 F.3d 135, 140 (Fed. Cir. 1996) (citations omitted). The above exhibits
mainly relate to the number of units, and Owner fails to show whether these sales
were substantial with respect to the market. See ACP 40 (requesting a comparison
between Square and other companies who sold readers). Specifically, we do not
agree with Owner’s statement that the evidence shows the market share went from
zero to 12.5 percent. Owner App. Br. 52, Evidence App’x, Exs. 19 and 23.
Rather, the evidence states there are only eight million merchants currently
accepting credit cards in the United States, and Square has added one million.
This evidence demonstrates that Square has added to or grown the market within
the United States. Owner App. Br. 52, Evidence App’x, Ex. 23. On the other
hand, Square has described its customer base as about ten percent, but this number
is limited to Visa and MasterCard customers, excluding American Express,
Discover and others in the market. Owner App. Br. 57, Evidence App’x, Ex. 19.
Accordingly, evidence of units sold and sales in Exhibits 13, 19, 23, and 27
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(Owner App. Br. 53-54) are insufficient to indicate whether these sales are
substantial in the market, providing at best a weak showing of commercial success.
Also, the cited evidence indicates that Requester’s card reader’s success is
tied to reasons other than the claimed invention. First, the evidence attributes
Requester’s product popularity in part to the position that many businesses found
the overhead of traditional merchant accounts were too burdensome. See Owner
App. Br., Evidence App’x, Ex. 19. Second, the card readers were given away for
free. See Owner App. Br. 53, Evidence App’x, Exs. 19, 23, and 27 (stating
“Branson ‘took an interest in Requester’s rapid growth and novel technology, in
particular its free hardware . . . .) This illustrates that the free reader – not the
merits of the claimed invention itself – contributed to Requester’s commercial
success. See Requester Resp. Br. 20. Owner also discusses that the Requester
reader has “garner[ed] significant attention for its bite-size credit card reader.”
Owner App. Br. 53 (citing Evidence App’x, Ex. 5). This article indicates the
reader’s size, which finds no corresponding limitation in independent claims 1, 7,
and 14, is why the card readers are popular.
To demonstrate commercial success, Owner further relies on the Morley
declaration (Owner App. Br., Evidence App’x, Ex. 1) and Exhibits 6, 8, 10, and 13
in the Evidence Appendix of Owner’s Appeal Brief. Owner App. Br. 52-53.
Evidence that Roam Data started giving away readers encompassing the claimed
invention does not illustrate a sufficient nexus tied to the claimed invention for the
above-stated reasons. Owner App. Br. 52-53 (citing Evidence App’x, Ex. 1, ¶¶ 42-
52, Exs. 8, 10, 13). For example, any of Intuit’s alleged commercial success may
be related to the consumer not having to pay for the reader or because the service
does not require a monthly fee or a contract. Owner App. Br., Evidence App’x,
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Exs. 1 (¶¶ 45-46), 8, 10, and 13. Additionally, the Morley declaration has no
supporting information that Intuit’s reader (i.e., “the Mophie reader”), when it cost
$79.95, was “not successful.” Owner App. Br., Evidence App’x, Ex. 1, ¶ 44.
Moreover, Owner argues that demonstrating these card readers embody the
claimed features (Owner App. Br., Evidence App’x, Exs. 1, ¶¶ 46, 48, and 18, ¶¶ 7,
32) is sufficient to presume a nexus between commercial success and the claimed
features. See Owner Reb. Br. 22 and Oral H’g 20 (citing Brown & Williamson
Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1129 (Fed. Circ. 2000). We
find other evidence has rebutted any presumed nexus as explained in the above
discussion.
Lastly, the Examiner discusses a claimed feature that distinguishes over the
prior art – the output jack – and asserts that this “critical” feature is not shown to
have a nexus to the commercial success of Requester’s reader. ACP 38, 42.
Owner argues this statement demonstrates that the Examiner applied the incorrect
standard. Owner App. Br. 46, 55-56. We agree that this statement taken alone
does not apply the current test set forth in Rambus Inc. v. Rea, 731 F.3d 1248 (Fed.
Cir. 2013), which states “the obviousness inquiry centers on whether ‘the claimed
invention as a whole’ would have been obvious” and that evidence that touts the
patented design as a whole must be considered. Id. at 1257-58.
Yet, the Examiner’s statements are not without any legal basis. For
example, “[e]ven assuming that [Owner] has sufficiently demonstrated commercial
success, that success is relevant in the obviousness context only if there is proof
that the sales were a direct result of the unique characteristics of the claimed
invention – as opposed to other economic and commercial factors unrelated to the
quality of the patented subject matter.” See Huang, 100 F.3d at 140. Also, In re
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Kao, 639 F.3d 1057 (Fed. Cir. 2011) supports the notion that “[w]here the offered
secondary considerations actually results from something other than what is both
claimed and novel in the claim, there is no nexus to the merits of the claimed
invention.” Id. at 1068. As discussed above, we find evidence that the sales were
the result of other commercial factors and not a direct result of the characteristics
of the claimed invention.

C. Other Evidence
Owner also contends the provided evidence illustrates the failure of others,
disruptive technology, recognition by others, and long-felt need. Owner App. Br.
43. Regarding the evidence of disruptive technology, we are unaware of and
Owner provides us with no case law to support the notion that a disruptive
technology provides evidence to outweigh an obviousness rejection. See Owner
App. Br. 43, 57, Evidence App’x, Ex. 1, ¶ 29. Similarly, the Examiner states that
she is unclear what point Owner is making concerning disrupting the market by
giving away free card readers. ACP 39-40. To the extent Owner is attempting to
show that disruption demonstrates substantial sales in the market, we find that the
relied-upon exhibit for this premise states, “if this is disruptive technology”
(emphasis added), and not that the technology is disruptive. See Owner App. Br.,
Evidence App’x, Ex. 6, p. 2. Thus, any connection between disruption in the
market and substantial sales with the evidence of record is tenuous.
Also, Owner has asserted that there is a causal relationship between the
claimed invention and commercial success due to the reader’s size and the need for
other companies to give the card reader away for free in order to enter the mobile
credit card field (see Owner App. Br. 52-53, 57, Evidence App’x, Ex. 1, ¶¶ 34-36).
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We, like the Examiner, are not persuaded that this evidence demonstrates a
sufficient nexus between commercial success and the claimed invention. For
example, Owner asserts that the statements made by Mimi Hart, CEO of Magtek
Inc., demonstrate appreciation of customers and evidence whether the invention
would have been obvious. Owner App. Br. 57 (citing Evidence App’x, Ex. 6).
Ms. Hart indicates that “capturing the analog waveform” and decoding “further
down the pipe” permits for a low-cost product. The feature of capturing an analog
waveform is not found in claim 1, and thus does not establish a nexus between the
invention in claims 1, 7, and 14 and the commercial success. Moreover, this
exhibit further states that Requester has “great press” and “hype,” suggesting that
the marketing of the reader has attributed to the card reader’s success. Owner App.
Br., Evidence App’x, Ex. 6.
Concerning demonstrating long felt need and failure of others, Owner fails
to point specifically to evidence that supports these positions. See Owner App. Br.
43. To the extent that what is discussed in the briefs demonstrates a long-felt need,
failure of others, or recognition by other, we disagree and further refer to our above
discussion.
In conclusion, the Board is given broad deference in its weighing of the
evidence of secondary considerations. See In re Inland Steel Co., 265 F.3d 1354,
1366 (Fed. Cir. 2001). Even when some evidence of commercial success is
provided, such evidence may not outweigh a strong case of obviousness. See id. at
1366. As illustrated discussed above, the claimed invention as whole has been
considered by the Office, such that the overall conclusion that the presented
evidence of secondary considerations is not sufficient to overcome the obviousness
rejections is sound. See ACP 37. Based on the above discussion, we are not
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persuaded that the presented secondary evidence outweighs the case of
obviousness for claims 1-13.
Accordingly, we are not persuaded that the Examiner erred in rejecting: (1)
claims 1-3 and 5 as being obvious over (a) Lekernel or (b) von Mueller I, Antonio,
and Padilla I; (2) claim 6 as being obvious over von Mueller I, Antonio, and
Padilla I; (3) claim 4 as being obvious over (a) Lekernel and Gullickson or (b) von
Mueller I, Antonio, Padilla I, and Gullickson; and (4) claims 7-13 as being obvious
over von Mueller I, Antonio, Padilla I, and Draeger or Wood.

5. Non-Adopted Rejections – Cross Appeal by Requester
Independent claim 14 recites similar limitations to independent claims 1 and
7, with two additional limitations. First, claim 14 recites the card reader device
includes an integrated circuit (IC) connected to the signal setting device and read
head. Second, claim 14 also recites the output plug is connected to the IC and
adapted to receive power from the host device by an audio output associated with
the host device. Requester App. Br, Claims App. A-1.

a. Withdrawn Rejection based on Wood, Odagiri, and Antonio
The Examiner rejected claim 14 through 20 based on Wood, Odagiri, and
Antonio, but later withdrew the rejection. ACP 6-7; RAN 5, 19. The Examiner
acknowledges that Odagiri teaches transferring power from a host device using an
audio output associated with a host device. ACP 6. However, the Examiner finds
that
It is not clear that it would be obvious to one of ordinary skill in the art that
the teachings of Odagiri with relation to powering and transferring image
and sound data between a digital camera and an earphone jack would
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translate to using an earphone jack to power and transfer magnetic card data
between a card reader and a host device. Antonio cannot be used to bridge
this difference because Odagiri discloses the use of a particular plug (shown
in Figure 2, for example) and a specialized earphone jack (broadly depicted
in Figure 22 to include power line L1a, data request line L1b data output line
L1C.). Insofar as Odagiri appears to require extensive adaptations to both
the output plug of the host device and the earphone jack, Antonio's teachings
of a universal earphone/microphone connector are not directly applicable
and there is not enough evidence of record to conclude that it would be
obvious to one of ordinary skill in the art to incorporate Antonio's teachings
into the combination of Wood and Odagiri.

ACP 6-7. Owner agrees with the Examiner’s confirmation of claims 14 through
20. Owner Resp. Br. 14-18.
Requester asserts that the Examiner erred in withdrawing the rejection and
confirming claims 14 through 20. Requester App. Br. 8-19. Essentially, Requester
asserts that the prior art as a whole demonstrates that “it would have been well
within the capability of one of ordinary skill in the art to provide a card reader
including the output plug as defined by claims 14-20” (Requester App. Br. 8-9)
and that “[t]he withdrawal of the rejection fails to give proper weight to the
understanding of one of ordinary skill in the art” (Requester App. Br. 12). We
agree with Requester.
At the outset, we agree with and adopt the Examiner’s position set forth in
the November 23, 2011 Non-Final Office Action for claims 14 through 20. See
November 23, 2011 Non-Final Office Action 10-11 (incorporating Request, App.
F, September 30, 2011 Requester’s Comments 2-4 and 7-10, and the first
Thompson Declaration ¶¶ 18-34). For example, Wood teaches a card reader
device (see Title) that includes a read head (e.g., 10) for passing a magnetic stripe
(e.g., 32) of a card to read data stored on the magnetic stripe and for producing a
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signal indicative of data stored on the magnetic stripe. Request, App. F 74-75
(citing Wood); see also Requester App. Br. 9 (citing Wood). Additionally, based
on the above construction of “signal setting device for setting an amplitude of the
signal indicative of data stored on a magnetic stripe,” Wood teaches the recited
signal setting device (e.g., amplifier 36 or 36’) and an IC device connected to the
signal setting device (e.g., decode circuitry 44 or 44’ that includes IC components).
Request, App. F 75-77 (citing Wood); see also Requester App. Br. 9-10 (citing
Wood).
Concerning the claimed output plug, Wood teaches the card reader has an
output connector (e.g., 68) that is connected to the IC device and is adapted to plug
into a socket which is not shown. November 23, 2011 Non-Final Action 10 (citing
Wood); Wood ¶¶ 35-36, Fig. 5; the second Thompson declaration ¶ 13. Wood thus
teaches or suggests an output plug adapted to be inserted into an input associated
with some host device (not shown) and to provide the signal indicative of the data
stored on a magnetic stripe to the device. Antonio further teaches that it is known
to use a host device (e.g., a mobile device) to communicate voice and data packets
within a system and, more particularly, to receive any form of data, such as data
stored on a magnetic stripe, from a data input device using an
earphone/microphone connector. Antonio ¶¶ 3, 39; Fig. 3.
For example, Antonio teaches data input device 306 (e.g., a keyboard or
handwriting recognizer) that communicates any form of data to mobile electronic
device 302 (e.g., a cell phone) using earphone/microphone connector 304. Antonio
¶¶ 3, 39-43, Fig. 3. Odagiri also teaches a similar host device (e.g., cell phone) that
has an earphone/microphone plug (e.g., 10). Odagiri ¶¶ 141, 161-162, 193-94,
Figs. 2, 7, 15. Antonio teaches that an earphone/microphone plug (e.g., an output
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plug) “eliminate[s] the need for a separate and/or dedicated connector for the data
input device, thereby reducing the complexity and cost of the mobile electronic
device.” Antonio ¶ 42. Thus, Antonio suggests combining its and Odagiri’s
teachings of known output plugs with Wood in order to obtain a card reader that
eliminates the need for separate connectors and reduces complexity and costs.
Additionally, Wood discusses the read head is adapted to receive power but
does not specify from where the power is received. Wood ¶¶ 8-9, 13. Odagiri
teaches a known technique of using a host device (e.g., a cell phone) to provide
power to a data input device (e.g., a camera) through earphone microphone or
earphone jack 11 (e.g., an audio output L1a). Odagiri ¶¶ 141, 145, 161-162, 237,
Figs. 2-3, 7, 22; see also Requester App. Br. 10 and the second Thompson
declaration ¶ 14. Antonio teaches yet another data input devices (e.g., keyboard,
handwriting recognizer) connected to a host device through an
earphone/microphone connector. Antonio ¶¶ 41, 43. Given that Wood’s card
reader is another type of a data input device, Odagiri and Antonio thus suggest,
when combined with Wood, a card reader device having an output plug adapted to
receive power from a host device by an audio output associated with the host
device. See Requester App. Br. 11. Such an improvement to Wood is tantamount
to the predictable use of prior art elements according to their established functions.
See KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 417 (Fed. Cir. 2007).
Contrary to the Examiner and Owner’s position, we do not find that
“extensive adaptations to both the output plug of the host device and the earphone
jack” of Odagiri would have been required to arrive at claim 14 and to support a
conclusion of obviousness. ACP 6-7; see also Owner Resp. Br. 16-17. “The test
for obviousness is not whether the features of a secondary reference may be bodily
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incorporated into the structure of the primary reference . . . Rather, the test is what
the combined teachings of those references would have suggested to those of
ordinary skill in the art.” Keller, 642 F.2d at 425. As such, the features of Odagiri
and Antonio need not be bodily incorporated into Wood to support an obviousness
conclusion.
As noted by Requester, Odagiri teaches using an existing jack on a host
device reduces cost while receiving the plug to transfer power and data. Odagiri
¶ 293; see also Requester App. Br. 12-13. Thus, even though bodily incorporation
is not required for an obviousness rejection, no adaptation of the jack as taught by
Odagiri, and when combined this teaching with Wood, would be required.
Regarding the output plug taught by Odagiri, we acknowledge that this plug
has a contact (e.g., 11a or 71) that differs from the “standard” plug. See Owner
Resp. Br. 17; Odagiri ¶¶ 141, 162, Figs. 2-3, 7; see Owner Resp. Br., Evidence
App’x, Ex. 2, ¶ 9. Yet, Odagiri’s plug still operates within the confines of a
standard jack of the host device. See Odagiri ¶ 41; see also Requester App. Br. 13-
15 and Owner Resp. Br., Evidence App’x, Ex. 2, ¶ 17.
Moreover, claim 14 recites “an output plug . . . adapted to receive power
from the host device by an audio output associated with the host device.”
Respondent App. Br., Claim App. A-1 (emphasis added). The claim fails to recite
a specific portion of the plug receives the audio output associated with the host
device. See Requester App. Br. 15. Thus, we do not find that the teachings
concerning Odagiri’s plug requires any extensive adaptation, when combined with
Wood, to meet the limitation of claim 14.
Even assuming such an adaptation of Odagiri is needed, we agree with
Requester that the adaptation would not have been outside the scope of one skilled
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in the art. One skilled in the art given the above teachings, would have recognized
to include within a card reader an output plug that receives power from an audio
output associated with a host device. More specifically, one skilled in the art,
based on the teachings of Odagiri and Antonio, would have recognized that there
are only a limited number of possibilities where the power can be received from
the host device, and one skilled in the art would have recognized to use one of
those possibilities. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007).
Thompson supports this position. See Requester App. Br., Evidence App’x, Ex. 2,
¶¶ 21, 25. That is, “[c]ommon sense teaches . . . that familiar items may have
obvious uses beyond their primary purposes, and in many cases a person of
ordinary skill will be able to fit the teachings of multiple patents together like
pieces of a puzzle.” KSR, 550 U.S. at 420. Thus, the collective teachings suggest
to an artisan receiving power from the host device by an audio output associated
with the host device.
Owner asserts that combining Wood, Odagiri, and Antonio would render
Wood’s two simultaneous outputs inoperable and the combination is technically
impossible. Owner Resp. Br. 16 (citing Wood ¶¶ 31-32); see also Owner Resp.
Br., Evidence App’x, Ex. 1, ¶ 11. We note that that, while Wood shows two
parallel signals 40 in Figure 2, Wood fails to state these signals are “tightly
synchronized” (Owner Resp. Br., Evidence App’x, Ex. 1, ¶ 11) or “simultaneous
output signals” (Owner Resp. Br. 16).
Requester asserts Owner has not provided sufficient information to support
that Odagiri is limited to a single input and that Odagiri has sufficient contacts (i.e.,
11a-d) to allow for two outputs. Requester Reb. Br. 6-9. Once again, we stress
that bodily incorporation is not required to support an obviousness conclusion. See
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Keller, 642 F.2d at 425. Nonetheless, we agree with the Requester that the
combination as proposed can output two signals. For example, Odagiri teaches
embodiments where the plug has four contacts, including one of which can transfer
a clock signal (e.g., 11c or 525a) and one of which can transfer data (e.g., 11d or
525b). Odagiri ¶ 141, 193; Figs. 2, 15. Odagiri thus illustrates a way to output two
signals from a data input device to the host device and thus suggests combining its
teachings with Wood would not render Wood inoperable. Id.
Also, as stated above and by Requester, Antonio teaches any type of data
can be transmitting using an earphone/microphone connector that does not require
non-standardized data ports and a data input device to provide many
implementations. Requester Reb. Br. 9 (citing Antonio ¶ 39); see also Antonio
¶ 42. We therefore find that one skilled in the art would have recognized
modifying Wood’s connector for a plug taught by Odagiri or Antonio to transmit
data and other information without rendering Wood inoperable.
i. Consideration of Declarations
Owner and Requester filed declarations in support of or arguing against the
obviousness rejection based on Wood, Odagiri, and Antonio. As indicated supra,
Owner filed the Morley declaration, the first supplemental Morley declaration, and
second supplemental Morley declaration to support the Examiner’s withdrawal of
the rejection. Owner also submitted the Wood declaration. Requester filed the
first and second Thompson declarations to support the obviousness rejection. As
discussed above, we have considered the declarations in concluding that Wood,
Odagiri, and Antonio support an obviousness conclusion.
As to dependent claims 15-20, we adopt the Examiner’s position set forth in
the non-final office action. See November 23, 2011 Non-Final Office Action 10-
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11 (incorporating Request, App. F, Requester’s Comments 2-4 and 7-10, and the
first Thompson Declaration).
b. von Mueller and Odagiri
The Examiner did not adopt the proposed rejection for claims 14 through 20
based on von Mueller and Odagiri. July 1, 2011 Office Action 5. Because we
present a rejection for claims 14-20 based on Wood, Odagiri, and Antonio, we
decline to reach another proposed rejections for these claims which the Examiner
did not adopt. See 37 C.F.R. 41.77 (a) (“The Board … may affirm or reverse each
decision of the examiner on all issues raised on each appealed claim ….”); cf. In re
Gleave, 560 F.3d 1331, 1338 (Fed. Cir. 2009).

IV. CONCLUSION
Owner did not demonstrate that the Examiner erred in adopting the
above-identified rejections of claims 1-13.
Requester has demonstrated the Examiner erred in confirming claims 14-20.

V. TIME PERIOD FOR RESPONSE
This decision contains new grounds of rejection pursuant to 37 C.F.R.
§ 41.77(b) which provides that “[a]ny decision which includes a new ground of
rejection pursuant to this paragraph shall not be considered final for judicial
review.” Correspondingly, no portion of the decision is final for purposes of
judicial review. A requester may also request rehearing under 37 C.F.R. § 41.79, if
appropriate, however, the Board may elect to defer issuing any decision on such
request for rehearing until such time that a final decision on appeal has been issued
by the Board. For further guidance on new grounds of rejection, see 37 C.F.R.
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§ 41.77(b)-(g). The decision may become final after it has returned to the Board.
37 C.F.R. § 41.77(f).
Section 41.77(b) of Title 37 of the Code of Federal Regulations also
provides that the Owner, WITHIN ONE MONTH FROM THE DATE OF THE
DECISION, must exercise one of the following two options with respect to the
new grounds of rejection to avoid termination of the appeal as to the rejected
claims:
(1) Reopen prosecution. The owner may file a response requesting reopening
of prosecution before the examiner. Such a response must be either an amendment
of the claims so rejected or new evidence relating to the claims so rejected, or both.
(2) Request rehearing. The owner may request that the proceeding be
reheard under § 41.79 by the Board upon the same record . . . .
Any request to reopen prosecution before the examiner under 37 C.F.R.
§ 41.77(b)(1) shall be limited in scope to the “claims so rejected.” Accordingly, a
request to reopen prosecution is limited to issues raised by the new ground(s) of
rejection entered by the Board. A request to reopen prosecution that includes issues
other than those raised by the new ground(s) is unlikely to be granted.
Furthermore, should the Owner seek to substitute claims, there is a presumption
that only one substitute claim would be needed to replace a cancelled claim.
A requester may file comments in reply to Owner response. 37 C.F.R.
§ 41.77(c). Requester comments under 37 C.F.R. § 41.77(c) shall be limited in
scope to the issues raised by the Board's opinion reflecting its decision to reject the
claims and the Owner's response under paragraph 37 C.F.R. § 41.77(b)(1). A
newly proposed rejection is not permitted as a matter of right. A newly proposed
rejection may be appropriate if it is presented to address an amendment and/or new
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evidence properly submitted by the Owner, and is presented with a brief
explanation as to why the newly proposed rejection is now necessary and why it
could not have been presented earlier.
Compliance with the page limits pursuant to 37 C.F.R. § 1.943(b), for all
Owner responses and requester comments, is required.
The examiner, after the Board's entry of Owner response and requester
comments, will issue a determination under 37 C.F.R. § 41.77(d) as to whether the
Board's rejection is maintained or has been overcome. The proceeding will then be
returned to the Board together with any comments and reply submitted by the
owner and/or requester under 37 C.F.R. § 41.77(e) for reconsideration and issuance
of a new decision by the Board as provided by 37 C.F.R. § 41.77(f).
Requests for extensions of time in this inter partes reexamination
proceeding are governed by 37 C.F.R. § 1.956. See 37 C.F.R. § 41.77(g).

AFFIRMED-IN-PART
37 C.F.R. § 41.77(b)

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FOR OWNER:
Robert Greene Sterne
Sterne Kessler Goldstein Fox
1100 New York Avenue, N.W.
Washington, DC 20005

FOR THIRD-PARTY REQUESTER:
Scott A. McKeown
Oblon, Spivak, McClelland, Maier & Neustadt, LLP
1940 Duke Street
Alexandria, Virginia 22314