Ex Parte Ferrari

Patent Trial and Appeal Board

Mar 20, 2013

11675444 (P.T.A.B. Mar. 20, 2013)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________
Ex parte MICHAEL R. FERRARI
____________________

Appeal 2011-005560
Application 11/675,444
Technology Center 3600
____________________

Before: MEREDITH C. PETRAVICK, MICHAEL W. KIM, and NINA L.
MEDLOCK, Administrative Patent Judges.

KIM, Administrative Patent Judge.

DECISION ON APPEAL

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STATEMENT OF CASE
Appellant seeks our review under 35 U.S.C. § 134 from the
Examiner’s final rejection of claim 23. We have jurisdiction under 35
U.S.C. § 6(b).

SUMMARY OF THE DECISION
We AFFIRM and enter a NEW GROUND OF REJECTION pursuant
to 37 C.F.R. § 41.50(b).

BACKGROUND
Appellant’s invention is directed to a method of saving utilizing an
electronic network (Specification 1:12-14). Claim 23 is illustrative:
23. A method of saving for a specific goal, comprising the
steps of:
accessing by a customer through an electronic network a
secured database and controller provided by a website of
a third-party service provider;
opening by the customer a savings account, hosted by a
financial institution of the service provider, through the
website and the electronic network wherein the savings
account has at least one savings goal;
designating the savings account as public by having the
customer input contact information of an outside party
into the secured database so that invitations describing
the savings goal are sent by the third-part service
provider to the outside party asking whether the outside
party wishes to contribute money to the savings account
using an ACH transfer, e-payment system, debit card, or
credit card;
transferring funds via the electronic network from a financial
account of the outside party to a service provider's
account at the financial institution of the service
provider;
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automatically notifying the customer via e-mail of the
contribution by the outside party and providing an option
to accept via the electronic network the contribution; and
transferring funds from the service provider account to the
savings account only upon acceptance by the customer of
the contribution.

Appellant appeals the following rejection: Claim 23 is rejected under
35 U.S.C. § 103(a) as unpatentable over Tso (US 2001/0049637 A1, pub.
Dec. 6, 2001), Friedman (US 2006/0167780 A1, pub. Jul. 27, 2006),
RedOrbit News, Continental Airlines First to Offer New Travel Gift Registry
at Continental.com, Oct. 11, 2005, retrieved from
http://www.redorbit.com/modules/news/tools.php?tool=print&id=267710,
(hereinafter “Red Orbit”), and Blinn (US 7,155,411 B1, iss. Dec. 26, 2006).

FACTUAL FINDINGS
We find the following facts by a preponderance of the evidence.
Additional evidence is referenced in the analysis below.
1. The Specification does not define or describe the term account.
2. The ordinary and customary definition of the term account, as defined
by MERRIAM WEBSTER’S COLLEGIATE DICTIONARY (10th ed.), is: “a
record of debit and credit entries to cover transactions involving a
particular item or a particular person or concern.”
3. The Specification does not define or describe the term financial.
4. The ordinary and customary definition of the term financial, as defined
by MERRIAM WEBSTER’S COLLEGIATE DICTIONARY (10th ed.), is:
“money or other liquid resources of a government, business, group, or
individual.”
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5. Friedman discloses transferring funds via the electronic network from a
financial account of the outside party to a service provider’s account at
the financial institution of the service provider, in that it “uses payment
means to donate a specific amount of money to the prospective student's
registry account, step 150. Such payment means may include, by way of
example, a credit card ....” (Para. [0043]).
6. Friedman discloses transferring funds from the service provider account
to the savings account, in that “funds that are donated to registry account
18 preferably are then forwarded to college savings plan account 12 by
registry 10 ....” (Para. [0043]).
7. Friedman discloses a “college savings plan account registry, a method
for donating funds to a college savings plan account through the registry
....” (Para. [0003]).
8. Friedman discloses inviting an outside party describing the savings goal
when the donor receives a registry account number for a student. (Para.
[0042]).
9. The Specification defines a public account as “permit[ing] a customer 18
to accept electronic gifts from third parties 36.” (Spec. 5, ll. 29-30).
10. Friedman discloses that “any individual may contribute funds to the
college savings plan account ....” (Para. [0011]).
11. Friedman discloses that “gift card 28 may be distributed to potential
donors without any stored value, through means such as mail ....” (Para.
[0049]).
12. Friedman discloses a custodian opening a savings account as the college
savings plan account. (Para. [0034]).
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13. Friedman discloses that if a child for whom an account is being opened
is old enough, “the prospective student may direct certain activity in
place of the custodian.” (Para. [0010]).
14. Blinn discloses providing an option to accept the contribution via the
electronic network and transferring funds only upon acceptance by the
customer of the contribution, stating, “the other user may be prompted
(e.g., the next time he or she signs-in to his or her account) to approve
the receipt.” (Col. 11, ll. 4-7).
15. The Examiner articulated a rationale for combining Tso and Friedman to
be “because it would allow other individuals, if wanted or needed, to
contribute to your savings goal in order to achieve it quicker and to
easily keep the user up to date on their savings progress.” (Ans. 6).
16. The Examiner articulated a rationale for combining Tso/Friedman with
Red Orbit to be “‘offers customers an easy way to create a gift account.
(Red Orbit paragraph 3).’” (Ans. 6).
17. The Examiner articulated a rationale for combining Tso/Friedman/Red
Orbit with Blinn to be “it is a quick and easy way for the customer to
selectively decide whom they receive gifts from.” (Ans. 6).

ANALYSIS
Obviousness Rejection
We are not persuaded by Appellant’s argument that the references do
not meet both limitations directed to transferring funds because Friedman “is
limited to disclosing the transferring of the donor’s funds directly into the
student’s 14 registry account 18.” App. Br. 5, Reply Br. 2-6.
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The claim requires three types of accounts: a financial account of the
outside party, a savings account and a service provider’s account. The term
account is not defined, so we use the ordinary and customary meaning of “a
record of debit and credit entries to cover transactions involving a particular
item or a particular person or concern.” FF 1, 2. We construe financial
account as a record of transactions of money or other liquid resources. FF 3,
4. We construe a savings account as a record of transactions with a goal of
creating a positive balance of the subject of the transactions, such as money.
We construe a service provider’s account as a record of transactions used by
a service provider, which may be the party that keeps the record that is the
account.
We find Friedman discloses transferring funds from a financial
account of the outside party (a credit card) to a service provider’s account
(student’s registry account). FF 5. We further find Friedman discloses
transferring funds from the service provider account (registry account 18) to
the savings account when it is “forwarded to college savings plan account 12
....” FF 6.
We are not persuaded by Appellant’s argument that the references fail
to disclose invitations describing the savings goal being sent. App. Br. 5,
Reply Br. 6.
We consider the content of describing the savings goal as non-
functional descriptive material that does not affect the steps of the method
and is not given patentable weight. See In re Lowry, 32 F.3d 1579, 1582-83
(Fed. Cir. 1994). Nonetheless, Friedman discloses a registry of accounts for
the purpose of directing money specifically to college savings plan accounts.
FF 7. Friedman further discloses that donors receive registry account
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numbers for students, and we infer from this that the donor is invited to
donate at the registry that is for the savings goal of college expenses of the
particular student. FF 8. We find one of ordinary skill in the art would
recognize that a donor would be informed of the purpose of the account
number received, and that this effectively would be part of an invitation to
donate. Therefore, Red Orbit for this limitation is cumulative. Ans. 6.
We are not persuaded of error by Appellant’s argument that the
references fail to disclose designating the savings account as public. App.
Br. 7-8. The Specification defines a public account as “permit[ing] a
customer 18 to accept electronic gifts from third parties 36.” FF 9.
Friedman discloses in its background that “any individual may contribute
funds to the college savings plan account” and that registry designates the
account to be public by permitting individuals other than the student to
donate money to the account. FF 6, 10.
We are also not persuaded by Appellant’s argument that the
references do not designate the account as public by having the “customer
input contact information of an outside party into the secured database” as
required. App. Br. 8-9. Friedman discloses that one mode of inviting
donors to donate is by distributing gift cards through the mail. FF 11. The
fact that gift cards were distributed by mail to potential donors does not
mean, by itself, that their contact information was necessarily entered into
the secured database by the customer. The customer could have sent them
independent of the database. However, it would have been obvious for the
customer to enter the contact information of the outside party into the
secured database, because it saves the outside party the trouble of having to
do that when they donate, thus making it easier and more convenient for the
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outside party to contribute funds. It is also easier to manage the
contributions since the donor’s information is already in the system. These
rationales to modify Friedman are supported by Friedman itself, as
paragraph [0014] discloses:
a need exists in the art for a college savings plan registry that
overcomes the problems of the prior art by enabling easy and
convenient contribution of funds to college savings plan
accounts. A need also exists in the art for a method for
donating funds to college savings plan accounts, and for
managing the contributions to such accounts, in an easy and
convenient manner.
As our rationale for asserting that Friedman suggests “customer input
contact information of an outside party into the secured database” differs
from that set forth by the Examiner, we denominate it a NEW GROUND OF
REJECTION pursuant to 37 C.F.R. § 41.50(b).
We are not persuaded by Appellant’s argument that the references fail
to disclose “opening by the customer a savings account.” App. Br. 9.
Friedman discloses opening a college savings plan account by a
custodian, and that the student may instead do this action. FF 12, 13.
Therefore, Friedman discloses that a customer or the customer’s agent may
open a savings plan, thus meeting the claim language.
We are not persuaded by Appellant’s argument that Blinn does not
disclose providing an option to accept via the electronic network the
contribution; and transferring funds ... only upon acceptance by the
customer of the contribution, because:
Blinn does not disclose contributed funds being transferred to a
savings account or the first user opening an account wherein a
third party service provider contacts outside parties by sending
outside parties invitations asking for contributions and
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subsequently both notifying the first user and transferring the
funds into the first user's account only upon acceptance by the
first user, as required by claim 23.
App. Br. 10, Reply Br. 2-6.
Blinn discloses, when seeking to add funds to an account from a user
to an “other user,” that “the other user may be prompted (e.g., the next time
he or she signs-in to his or her account) to approve the receipt,” which meets
the disputed claim limitation. FF 14.
We are not persuaded by Appellant’s argument that the references fail
to disclose a reason to combine, and that the only reason to combine is
through impermissible hindsight. App. Br. 11-16. To the extent Appellant
seeks an explicit suggestion or motivation in the reference itself, this is no
longer the law in view of the Supreme Court’s recent holding in KSR Int’l
Co. v. Teleflex Inc., 550 U.S. 398, 419 (2007). In addition, we conclude the
Examiner articulated rationales for each of the three combinations, which we
find reasonable. FF 15-17. Therefore, we find the Examiner’s rationale to
combine is reasonable and not based on Appellant’s disclosure, but rather on
the knowledge of one of ordinary skill in the art.
To this point, therefore, we find the Appellant has failed to show error
in the Examiner’s prima facie case of obviousness in the rejection of claim
23 under 35 U.S.C. § 103(a).
Secondary Considerations
Next, evidence pertaining to secondary considerations must be taken
into account because it is present; however, it does not necessarily control
the obviousness conclusion. See, e.g., Pfizer, Inc. v. Apotex, Inc., 480 F.3d
1348, 1372 (Fed. Cir. 2007) (“the record establish[ed] such a strong case of
obviousness” that allegedly unexpectedly superior results were ultimately
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insufficient to overcome obviousness conclusion). Facts established by
rebuttal evidence must be evaluated along with the facts on which the
conclusion of a prima facie case was reached, not against the conclusion
itself. See In re Eli Lilly & Co., 902 F.2d 943 (Fed. Cir. 1990). “[E]vidence
that has been presented in a timely manner should not be ignored, but rather
should be considered on the record. However, not all evidence need be
accorded the same weight.” Manual of Patent Examining Procedure § 2145
(8th Ed. Rev. 9, 2012).
Widespread Recognition and Praise
Appellant presents several exhibits evidencing praise, so we examine
each in turn. Objective evidence of nonobviousness, including commercial
success and industry praise, must be commensurate in scope with the claims.
Asyst Techs., Inc. v. Emtrak, Inc., 544 F.3d 1310, 1316 (Fed. Cir. 2008)
(rehearing and rehearing en banc denied).
The Des Moines Register article includes mention of a) saving for a
specific goal, b) digital social networking, and c) rewards, as well as
automatic deductions, regulatory concerns, and the look-and-feel of their
web site as “very Web 2.0.” Exhibit 3. Aside from the focus on saving for a
specific goal, much like the Friedman reference, the remainder of the article
highlights features that are not commensurate in scope with the claim. The
claim, for example, does not recite limitations directed to “social
networking” beyond email, rewards, automatic deductions, regulatory
concerns with particular types of accounts, or the style of the web site.
The Netbanker article describes features that correspond to the claim,
but their praise, and criticism, also is based on features not in the claim, such
as automatic withdrawals, restricted withdrawals before reaching the goal,
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partner bonuses, gift card redemption, and donation fees. Exhibit 5. It is
difficult to separate the praise between claimed and non-claimed features
and aspects.
The americanconsumernews.com article describes features that
correspond to the claim, but also includes non-claimed features such as the
web site making recommendations, automatic deductions to fund the
savings, bonus incentives from retailers, and overcoming security concerns
through monitoring. Exhibit 6.
Appellant points to the quotation by its web designer, in the Business
Record article, who praises the site they designed, saying it “really tries to
maximize the social interaction component....” Exhibit 7. The article also
quotes the banking partner who adds the expectation that the product will be
successful “in part because it’s adding the social networking element and
gift card component ....” Id. Although we would assume these parties have
a vested interest in the success of the product/site, it is not clear how the
“social interaction/networking” relates to the claim. The gift card, however,
appears to have no relation to the claim.
The insideoutbranding.com article mentions “collaborative saving,”
which we interpret is the ability for several parties to make deposits, like the
also-mentioned 529 college savings plans, but for additional purposes.
Exhibit 8.
The banknet360.com article mentions “you can make your goals
public and have friends and family contribute” but also describes debit card
withdrawals, “5% added” bonuses from partners, a “not bad” interest rate
paid, as well as criticizing additional fees. Exhibit 9.
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The savvydaddy.com article mentions the SmartyPig account is
“different” because it is “communal” because other people can contribute.
Exhibit 11. The article also mentions the interest rate, which is higher than
the rate on the author’s account. Id. But the article does not further address
the claim or include praise.
The tMichaelB.blogspot.com article praises the invention because it
compares it to other “internet bank accounts.” Exhibit 12. The claim,
however, is much broader than a bank account, as set forth above.
The F.I.R.S.T. article reports that the opportunity to save for specific
goals along with the option of sharing these goals publicly with family and
friends “took the Internet by storm,” but says little else. Exhibit 13.
The exhibits therefore do offer praise, but the praise is not limited to
the claimed features and may flow from other non-claimed features, as
mentioned.
Satisfaction of a Long-felt Need
Appellant puts forth evidence that the claimed invention provides a
solution to a long-felt problem of declining savings, relying on the following
quotation from the affidavit of Mr. Stanberry (App. Br. 23-24): “Prior to
SmartyPig, an Internet bank account to which friends and family could make
remote contributions, while only the accountholder can make withdrawals,
was unknown in the banking industry.” Exhibit 4.
To be given substantial weight in the determination of obviousness or
nonobviousness, evidence of secondary considerations must be relevant to
the subject matter as claimed, and therefore we must determine whether
there is a nexus between the merits of the claimed invention and the
evidence of secondary considerations. Ashland Oil, Inc. v. Delta Resins &
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Refractories, Inc., 776 F.2d 281, 305 n.42 (Fed. Cir. 1985), cert. denied, 475
U.S. 1017 (1986). Here, Mr. Stanberry refers to “an Internet bank account,”
but the claim is directed to a savings account, which is a much broader
concept. Nothing in the claim limits the method to a “bank account” or the
undefined concept of an “Internet bank account.” Therefore, we must
conclude that this evidence is not commensurate with the scope of the claim.
In addition, establishing long-felt need requires objective evidence
that an art recognized problem existed in the art for a long period of time
without solution. In particular, the evidence must show that the need was a
persistent one that was recognized by those of ordinary skill in the art. In re
Gershon, 372 F.2d 535, 539 (CCPA 1967). No such evidence is before us.
Skepticism by Others
The evidence of skepticism of experts is confined to one affidavit of
the co-owner of the assignee that states that one individual at the FDIC was
skeptical that the invention “would work” because of being “susceptible to
fraud,” which was overcome by showing the system is “secure” and includes
access limitations. Exhibit 14.
The claimed invention, however, does not require an account subject
to FDIC oversight, because savings account is broadly interpreted as a
record of transactions with a goal of creating a positive balance of the
subject of the transactions, which is not limited to money. The claimed
invention also does not address fraud, except in the broad and undefined use
of a “secured database.” The nature of the secured database, however, is
undisclosed. Therefore, the indirect evidence of skepticism of one
individual does not appear to correlate directly to the claim, and may relate
to other factors outside the claim, such as the security requirements of FDIC-
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controlled accounts, or the specifics of the “secured database.” See Joy
Techs., Inc. v. Manbeck, 751 F.Supp. 225, 232 (D.D.C. 1990), aff'd, 959
F.2d 226 (Fed.Cir.1992) (expert’s expressed skepticism was entitled to little
weight as evidence of non-obviousness because it “was directed to economic
and commercial factors, not the technical merit of [the claimed invention]”).
Commercial Success
Appellant puts forth evidence of commercial success in the form of
the assertion of the “interest from financial service companies” (Exhibit 14),
evidence suggesting the “interest” of one individual (Exhibit 16), evidence
of a “relationship” with a bank (Exhibit 4), affidavits of two customers
(Exhibits 17 and 18), and evidence of one commercial license (Exhibits 20
and 23).
The hard evidence of commercial success, therefore, is one license
and one “relationship.” Further, gross sales figures do not show commercial
success absent evidence as to market share (Cable Electric Prods., Inc. v.
Genmark, Inc., 770 F.2d 1015 (Fed. Cir. 1985)), or as to the time period
during which the product was sold, or as to what sales would normally be
expected in the market (Ex parte Standish, 10 USPQ2d 1454 (BPAI 1988)).
We do not find the evidence of market share or expected sales, and therefore
find the one license and one relationship, as compared to the whole of the
industry of “savings accounts” represented by banking, college funds,
loyalty programs, and so on, is not substantial.
Conclusion
In considering the evidence in total, the evidence of secondary
considerations does not outweigh the evidence of record pointing to the
obviousness of the claimed invention. See Asyst Techs., Inc. v. Emtrak, Inc.,
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544 F.3d 1310, 1316 (Fed. Cir. 2008) (“[E]vidence of secondary
considerations does not always overcome a strong prima facie showing of
obviousness.”).

DECISION
We AFFIRM the rejection of claim 23 under 35 U.S.C. § 103(a).
In addition to affirming the Examiner’s rejections of one or more
claims, this decision contains new grounds of rejection 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….
Should Appellant elect to prosecute further before the Examiner
pursuant to 37 C.F.R. § 41.50(b)(1), in order to preserve the right to seek
review under 35 U.S.C. §§ 141 or 145 with respect to the affirmed rejection,
the effective date of the affirmance is deferred until conclusion of the
prosecution before the Examiner unless the affirmed rejection is overcome.
If Appellant elects prosecution before the Examiner and this does not
result in allowance of the application, abandonment or a second appeal, this
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case should be returned to the Patent Trial and Appeal Board for final action
on the affirmed rejection, including any timely request for rehearing thereof.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).
AFFIRMED; 37 C.F.R. § 41.50(b)

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