Ex Parte Birle et al

Board of Patent Appeals and Interferences

Nov 1, 2010

10064745 (B.P.A.I. Nov. 1, 2010)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte JAMES R. BIRLE, JR., DAVID K. DOLAN, JEFFREY N.
EDWARDS, YONATHAN EPELBAUM, FREDERICK J. FIDDLE,
EMERSON P. JONES, STUART C. KAPERST, TODD K. KAPLAN,
DANIEL Y. KERSTEIN, DRAGOMIR KOLEV, RICHARD P. LUCIANO,
THOMAS H. PATRICK, JR., PAUL A. PEPE, ERIC STEIFMAN,
RUSSELL L. STEIN, BRENNAN J. WARBLE, RICHARD J. GREEN,
ROBERT RUDNICK, and FRANK R. STRONG
____________

Appeal 2009-010659
Application 10/064,745
Technology Center 3600
____________

Before, MURRIEL E. CRAWFORD, ANTON W. FETTING, and
JOSEPH A. FISCHETTI, Administrative Patent Judges.

CRAWFORD, Administrative Patent Judge.

DECISION ON APPEAL1

1 The two-month time period for filing an appeal or commencing a civil
action, as recited in 37 C.F.R. § 1.304, or for filing a request for rehearing,
as recited in 37 C.F.R. § 41.52, begins to run from the “MAIL DATE”
(paper delivery mode) or the “NOTIFICATION DATE” (electronic delivery
mode) shown on the PTOL-90A cover letter attached to this decision.
Appeal 2009-010659
Application 10/064,745

2
STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner’s
final decision rejecting claims 10 to 95. We have jurisdiction over the
appeal under 35 U.S.C. § 6(b).
We AFFIRM.

BACKGROUND
Appellants’ invention is directed to a financial instrument by a stock
company (Specification 1).
Claim 10 is illustrative:
10. A financial instrument issued by a stock company and held by a
holder, shares of stock of the company trading at a price, the
instrument having a market price, the instrument comprising:

a provision obligating the company to repay the principal
according to a predetermined term;

a provision making the instrument convertible into a
predetermined number of shares of stock of the company at a
predetermined conversion price;

a provision obligating the company to make a payment to the
holder with respect to passage of a time interval in the event the
market price of the instrument is in a predetermined
relationship to an accreted value thereof, the accreted value
defined as the issue price of the instrument plus an economic
accrual of a portion of a difference between the issue price and
the principal amount at maturity.

Appeal 2009-010659
Application 10/064,745

3
Appellants appeal the following rejections:
Claims 10 to 95 under 35 U.S.C. § 112.2
Claims 10-25, 35-43,52-59,62-75,84-90,92 and 95 under 35 U.S.C. §
101 as being directed to nonstatutory subject matter.

ISSUE
Did the Examiner err in finding that claims 10 to 95 are unpatentable
because the claims are directed to nonpatentable subject matter?

ANALYSIS
The § 112 rejection
We consider this rejection as it is directed to claims 10 to 95. The
Examiner states that it is not clear what is meant by the steps of “promising”
and “converting.” These steps are not recited in claims 10 to 95. Therefore,
we will not sustain this rejection as it is directed to claims 10 to 95.

The § 101 rejection
We initially note that abstract ideas or concepts are not statutory
subject matter under 35 U.S.C. § 101. See Bilski v. Kappos, 130 S.Ct. 3218,
3225 (2010) (“[t]he Court’s precedents provide three specific exceptions to §
101’s broad patent-eligibility principles: ‘laws of nature, physical
phenomena, and abstract ideas.’”) (quoting Diamond v. Chakrabarty, 447

2 The Appellants attempted to cancel claims 1 to 9 in an amendment dated
October 25, 2006. The Examiner did not enter the amendment. The
Examiner may want to cancel these claims upon return of this application.
We have not considered the patentability of these claims.
Appeal 2009-010659
Application 10/064,745

4
U.S. 303, 309 (1980)); see also In re Abrams, 188 F.2d 165, 168 (CCPA
1951) (“[c]itation of authority in support of the principle that claims to
mental concepts which constitute the very substance of an alleged invention
are not patentable is unnecessary. It is self-evident that thought is not
patentable.”).
We agree with the Appellants that the recitation of a “financial
document” and an “offering document” does not automatically cause the
claimed invention to be nonstatutory. However, with the exception of the
recitation in the preamble of the claims of a “financial instrument” or
“offering document,” all the elements of the claims relate to a mental
concept or an abstract idea of how to make money. In this regard, the
claims relate to an idea related to a financial arrangement between a stock
company and a holder of shares of the stock. The claims recite various ways
that a holder of shares of stock can make money by, for instance, receiving
principal paid according to a predetermined term, receiving a share of stock
of a company and receiving money in accordance with an accredited value.
In this way, the claims recite a way of converting money paid to a company
for value in terms of shares of stock, or accredited value. It is merely an
abstract idea of how to make money.
Moreover, the claims cover any known and unknown use of the
concept. The steps could be performed by any machine, existing or future-
devised. Furthermore, the processes as claimed could be accomplished by
human activity alone, including through mental processes. In the words of
Gottschalk v. Benson, 409 U.S. 63, 72 (1972), the claimed processes “would
wholly pre-empt the [payment to a holder with respect to passage of a time
interval] and in practical effect would be a patent on the [concept] itself.”
Appeal 2009-010659
Application 10/064,745

5
The recitation in the preamble of a “financial document” or an
“offering document” does not convert the otherwise nonstatutory subject
matter to statutory subject matter. First, as the recitations are in the
preamble of the claims and do not appear in the body of the claim, the
recitation of a “financial instrument” or an “offering document” is
introductory language that does not breath life and meaning into the claims.
Therefore, this introductory language does not limit the scope of the claims.
In re Pearson, 494 F.2d 1399, 1403 (CCPA 1974); Gerber Garment Tech.,
Inc. v. Lectra Sys., Inc., 916 F.2d 683, 688 (Fed. Cir. 1990) quoting Perkin-
Elmer Corp. v. Computervision Corp., 732 F.2d 888, 896 (Fed. Cir. 1984),
cert. denied, 469 U.S. 857 (1984).
Second, the recitation of a “financial instrument” and an “offering
document” in the preamble fails to make the claims statutory subject matter
because the prohibition against patenting abstract ideas “‘cannot be
circumvented by attempting to limit the use of the formula to a particular
technological environment’ or adding ‘insignificant postsolution activity.’”
Bilski v. Kappos, 130 S. Ct. at 3230 (citing Diamond v. Diehr, 450 U.S. 175,
191-92 (1981)). Thus, limiting the implementation of what would otherwise
be mental steps or abstract ideas to a “financial instrument” or an “offering
document” is insufficient to place the claims into the realm of patentable
subject matter under 35 U.S.C. § 101.
We, therefore, affirm the Examiner’s rejection. We recognize that our
rationale for rejecting the claims under 35 U.S.C. § 101 differs from the
rationale used by the Examiner. Therefore, we denominate our affirmance
of this rejection as a new ground of rejection pursuant to 37 C.F.R. §
41.50(b).
Appeal 2009-010659
Application 10/064,745

6
DECISION
We do not affirm the Examiner’s § 112 rejection of claims 10 to 95.
We affirm the Examiner’s § 101 rejections of claims 10-25, 35-43,52-
59,62-75,84-90,92 and 95 and denominate our affirmance as a new ground
of rejection.
This decision contains a new rationale for rejecting claims 10 to 95
under 35 U.S.C. § 101 pursuant to 37 C.F.R. § 41.50(b). 37 C.F.R. §
41.50(b) provides "[a] new ground of rejection pursuant to this paragraph
shall not be considered final for judicial review."
37 C.F.R. § 41.50(b) also provides that Appellant, WITHIN TWO
MONTHS 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. Submit an appropriate amendment of
the claims so rejected or new evidence relating to the claims so
rejected, or both, and have the matter reconsidered by the
examiner, in which event the proceeding will be remanded to
the examiner .…

(2) Request rehearing. Request that the proceeding be reheard
under § 41.52 by the Board upon the same record .…

TIME PERIOD
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1) (2009).

Appeal 2009-010659
Application 10/064,745

7
ORDER
AFFIRMED; 37 C.F.R. § 41.50(b)

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