Ex Parte Gross

Board of Patent Appeals and Interferences

Apr 7, 2010

11369660 (B.P.A.I. Apr. 7, 2010)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte JOHN N. GROSS
___________

Appeal 2009-005795
Application 11/369,660
Technology Center 3600
____________

Decided: April 7, 2010
____________

Before HUBERT C. LORIN, ANTON W. FETTING, and
JOSEPH A. FISCHETTI, Administrative Patent Judges.

LORIN, Administrative Patent Judge.

DECISION ON APPEAL
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STATEMENT OF THE CASE
John N. Gross (Appellant) seeks our review under 35 U.S.C. § 134
(2002) of the final rejection of claims 1-20. We have jurisdiction under 35
U.S.C. § 6(b) (2002).

SUMMARY OF DECISION
We AFFIRM-IN-PART and enter a new ground of rejection pursuant
to 37 C.F.R. 41.50(b). 1

THE INVENTION
The invention is a method of delivering rented media to a subscriber
not only based on returned/received status of other rented media in the
customer’s possession. Specification 3:8-9. In one embodiment, the
delivery is also based on the lapse of a predetermined time. Specification
3:24-31. In another embodiment, the delivery is also based on the
occurrence of an overcapacity triggering event, including demand associated
for the media item. Specification 4:4-16. In a final embodiment, the
delivery is also based on a selection of the media by the subscriber after
consultation by email. Specification 4:27-30.
Claim 1, reproduced below, is illustrative of the subject matter on
appeal.

1 Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed Apr. 16, 2008) and Reply Brief (“Reply Br.,” filed Sep. 9, 2008),
and the Examiner’s Answer (“Answer,” mailed Jul. 9, 2008).

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1. A method of delivering machine readable media to
subscribers of a media rental service comprising the steps
of:
(a) providing a maximum number of machine
readable media items (Nmax) which the subscribers can
have out at any moment in time from the media rental
service;
(b) identifying if a first subscriber has capacity
available for delivery of a first machine readable media
item requested by such first subscriber;
(c) selectively imposing a first delay on delivery of
said first machine readable media item to the first
subscriber even when said first subscriber has not
reached
Nmax;
said first machine readable media item being a title
which is subject to profit sharing between the media
rental service and a third party based on a distribution of
such title to said first subscriber.

THE REJECTION
The Examiner relies upon the following as evidence of
unpatentability:
Hastings
Matsushima
US 6,584,450 B1
US 2002/0138429 A1
Jun. 24, 2003
Sep. 26, 2002

The following rejection is before us for review:
1. Claims 1-20 are rejected under 35 U.S.C. §103(a) as being
unpatentable over Hastings and Matsushima.
ISSUES
The first issue is whether claim 2-7 are unpatentable under 35 U.S.C.
§ 103(a) over Hastings and Matsushima. Specifically, the major issue is
whether: 1) the combination of Hastings and Matsushima teaches a step of
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“selectively imposing a first delay on delivery of said first machine readable
media item to the first subscriber even when said first subscriber has not
reach Nmax” and 2) whether claim 1 requires a step of qualifying a delivery
of a media item based on its status as a profit sharing item.
The third issue is whether claims 8-14 are unpatentable under 35
U.S.C. § 103(a) over Hastings and Matsushima. Specifically, the major
issue is whether the combination of Hastings and Matsushima teaches step a)
evaluating a demand characteristic with a computing system for a first
machine readable media item requested by a first subscriber and “wherein an
amount of said delay is based on a usage behavior of said first subscriber,
such that an amount of delay imposed varies in accordance with said first
subscriber’s allotment of titles provided during a predetermined period.”
The second issue is whether claims 15-20 are unpatentable under 35
U.S.C. § 103(a) over Hastings and Matsushima. Specifically, the major
issue is whether the combination of Hastings and Matsushima teaches step
(d) selectively imposing a delay on delivery of said first media item to the
first subscriber based on the results of steps (b), (c) and (c’), where (c’) is a
step of identifying if said first subscriber has capacity available for delivery
of said first machine readable media item based on Nmax for such first
subscriber.

FINDINGS OF FACT
We find that the following enumerated findings of fact (FF) are
supported by at least a preponderance of the evidence. Ethicon, Inc. v.
Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988) (explaining the general
evidentiary standard for proceedings before the Office).
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The scope and content of the prior art
Hastings
1. Hastings describes a method for renting items to a customer on a
subscription basis. Col. 1, ll. 49-50.
2. Hasting describes a “MAX TURNS” approach and a “MAX OUT”
approach, which may be used together. Col. 4, ll. 40-42.
3. Hastings states: “In this situation, up to a specified number of total
items are simultaneously rented to customer 102 and up to a
specified number of item exchanges may be made during a
specified period of time.” Col. 6, ll. 47-50.
4. Figure 6 is reproduced below.

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Figure 6 illustrates a method using both the “MAX OUT” and
“MAX TURNS” approach.
5. Hastings states: “If, in step 610, a determination is made that one
or more movies 512 were received from customer 502, then in step
612, a determination is made whether the maximum number of
turns (“Max Turns”) limit has been reaches for the current cycle. . .
. If not, then control returns to step 608, where one or more
additional movies 512 are mailed to customer 502 via delivery
channel 514 up to the “Max Out” limit of four.” Col. 10, ll. 43-51.
6. Hasting states:
If, in step 612, a determination is made that the
“Max Turns” limit has been met for the current
cycle, i.e., in the present example, four movies 512
have been mailed to customer 502 in the current
month, then in step 614 a determination is made
whether to override the current “Max Turns” limit.
If so, then in step 616, a surcharge is applied to
customer 502 and control returns to step 608 where
the additional movies 514 are mailed to customer
502. If not, then in step 618, a determination is
made whether to continue subscription service. If
so, then no additional movies are mailed to
customer 502 during the current cycle, e.g., the
current month, and the control returns to step 610.
Col. 10, ll. 52-63.
7. Hasting also states:
If in step 410, a determination is made that the current
agreement is not to be overridden, then in step 414, no
items are delivered to customer 102 until the next
subscription period. For example, the request for
additional items may be received at the end of a
subscription period and instead of renting the additional
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items immediately, they are instead delivered during the
subsequent subscription period.
Col. 7, l. 64 – col. 8, l. 3.
8. Hastings describes the customer setting selection criteria which
specify a customer’s order queue that is fulfilled by the provider.
See col. 4, ll. 54-67 and col. 4, ll. 64-66.
9. Hastings describes that the selection criteria can include item titles
or other item attributes. See col. 4, ll. 54-67 and col. 8, ll. 43-65.
10. Hastings describes delivery criteria can be used to trigger item
delivery. Col. 5, ll. 2-8.
11. Hastings describes the delivery criteria including customer
requests, as well as, items being returned by the customer and the
occurrence of specific date. Col. 5, ll. 8-14.
12. Hasting in column 1, lines 12-19, describes that conventional
rental models require a customer to go to a video rental store to
rent movies and that new release movies are generally due back the
next day.

Matsushima
13. Matsushima describes a content distribution system. Matsushima
[0001].
14. Matsushima teaches for some content independent artists and
major record companies share profit when distributing the content.
Matsushima [0086].

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Any differences between the claimed subject matter and the prior art
15. Hastings does not describe that the item is a title which is subject
to profit sharing between the media rental service and a third party
based on a distribution of such title to said first subscriber.
16. Hastings does not teaches that the amount of delay imposed on the
delivery of the first machine readable media items varies in
accordance with the first subscriber’s allotment of titles provided
during a predetermined period.

The level of skill in the art
17. Neither the Examiner nor the Appellant has addressed the level of
ordinary skill in the pertinent art of electronic commerce. We will
therefore consider the cited prior art as representative of the level
of ordinary skill in the art. See Okajima v. Bourdeau, 261 F.3d
1350, 1355 (Fed. Cir. 2001) (“[T]he absence of specific findings
on the level of skill in the art does not give rise to reversible error
‘where the prior art itself reflects an appropriate level and a need
for testimony is not shown’”) (Quoting Litton Indus. Prods., Inc. v.
Solid State Sys. Corp., 755 F.2d 158, 163 (Fed. Cir. 1985)).

Secondary considerations
18. There is no evidence on record of secondary considerations of non-
obviousness for our consideration.

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PRINCIPLES OF LAW
Obviousness
Section 103 forbids issuance of a patent
when ‘the differences between the subject matter
sought to be patented and the prior art are such that
the subject matter as a whole would have been
obvious at the time the invention was made to a
person having ordinary skill in the art to which
said subject matter pertains.
KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007). 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, and (3) the level of skill
in the art. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). See also
KSR, 550 U.S. at 407 (“While the sequence of these questions might be
reordered in any particular case, the [Graham] factors continue to define the
inquiry that controls.”) The Court in Graham further noted that evidence of
secondary considerations “might be utilized to give light to the
circumstances surrounding the origin of the subject matter sought to be
patented.” Graham, 383 U.S. at 17-18.

ANALYSIS
The rejection of claims 1-20 under §103(a) as being unpatentable over
Hasting and Matsushima.
Claim 1
The Appellant argues that the combination of Hasting and
Matsushima does not teach: 1) selectively imposing a first delay on delivery
of said first machine readable media item to the first subscriber even when
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said first subscriber has not reached Nmax (App. Br. 8) and 2) “qualifying a
delivery of a media item based on its status as a profit sharing item as set out
in claim 1” (App. Br. 8, emphasis original).
First, in the Answer, the Examiner points to column 1, lines 12-29 of
Hastings, which describes that new release movies are generally due back
the next day, to teach the limitation of imposing a delay on delivery.
Answer 6. The Examiner states: “Therefore, the new release movie is
readable as a first delay process even the subscriber has not reached their
maximum number of movies or Nmax. Since new release movies have
different time expiration than regular fixed rental periods.” Sic. Answer 6.
In the Reply Brief, the Appellant responds that column 1, lines 12-29
is a discussion in Hastings of the deficiencies of the prior art and not part of
the Hastings system. Reply Br. 2.
Second, the Examiner states that Matsushima was applied to teach
that media items are subject to profit sharing as claimed. Answer 6-7.
We find that the Appellant has not overcome the rejection of claim 1
as unpatentable over Hastings and Matsushima. However, since our
reasoning below differs from that of the Examiner, we designate our
decision as a new ground of rejection.
Regarding the Appellant’s first argument, we find that Hastings
teaches a step of “selectively imposing a first delay on delivery of said first
machine readable media item to the first subscriber even when said first
subscriber has not reach Nmax.” Hastings teaches that the “Max Out”
approach may be used in combination with the “Max Turns” approach and
depicts, in Figure 6. FF 2. Hastings states, “In this situation, up to a
specified number of total items [max out] are simultaneously rented to
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customer 102 and up to a specified number of item exchanges [max turns]
may be made during a specified period of time.” FF 3. When a customer
returns an item so that they have less then their maximum number of
allowed items (max out), Hasting determines if the max turns limit has been
met for the time period. FF 5. If it has and it is determined that the “max
turns” limit cannot be overridden, then items are not sent to the customer
until the next subscription period. FF 6.
We find that this description teaches selectively imposing a first delay
on delivery of the first machine readable medium to the first subscriber even
when said first subscriber has not reach Nmax. Therefore, we find that
Hastings does teach the step (c) at issue.
Regarding the Appellant’s second argument, we find that claim 1 does
not require “qualifying a delivery of a media item based on its status as a
profit sharing item.” Step (c) of clam 1 requires selectively imposing a
delay on delivery, but does not require that the delay be selectively imposed
based on a media items status of as a profit sharing item. Claim 1 also
recites that the medium item is a title which is subject to a profit sharing but
does not link the status of the medium item to the imposed delay. Claim 1
merely describes the medium item as being subject to profit sharing.
Therefore, the Appellant’s second argument is directed to a limitation not
recited in the claim. “Many of appellant’s arguments fail from the outset
because, . . . they are not based on limitations appearing in the claims . . . .”
In re Self, 671 F.2d 1344, 1348 (CCPA 1982).
Accordingly, we sustain the rejection of claim 1 under 35 U.S.C.
§103(a) as unpatentable over Hastings and Matsushima. However, since our
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reasoning differs from that of the Examiner, we designate our decision as a
new ground of rejection.

Claims 2-7
The Appellant argues that the Examiner did not cite to any evidence
when rejecting claims 2, 3, and 5-7. Answer 9. In the Answer, the
Examiner points to column 1, lines 12-29 of Hastings to teach the limitations
of these claims. Answer 7-8. In addition, the Examiner points to column 6,
lines 1-12 and column 6, lines 14-29 to teach the limitations of claims 5-7.
Answer 8.
In the Reply Brief, the Appellant again responds that column 1, lines
12-29 is a discussion in Hastings of the deficiencies of the prior art and not
part of the Hastings system and that Hastings does not mention the
limitations of claims 5-7. Reply Br. 2-3.
We find that the Appellant has not overcome the rejection of claims 2,
4, 5, and 7 but has overcome the rejection of claims 3 and 6 as unpatentable
over Hastings and Matsushima. However, since our reasoning below, with
regards to claims 2, 5, and 7, differs from that of the Examiner’s, we
designate our decision as a new ground of rejection.
Regarding claim 2, claim 2 recites “wherein said first delay is only
imposed for a group of subscribers determined by the computing system.”
We agree with the Appellant that Hastings column 1, lines 12-29 is
discussing a deficiency of the prior art. FF 12. Further, the Examiner has
not supplied any explanation of how a description of requiring a customer to
return a new release movie the day after renting teaches the step of imposing
a delay in delivering a movie. See Answer 7.
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However, as discussed above, we find that Hastings imposes the delay
for the group of subscribers for which the max turns limit cannot be
overridden. FF 6-7. Therefore, we find that Hastings teaches the limitation
of claim 2. We find that the Appellant has not overcome the rejection of
claims 2, and we sustain the rejection of claims 2.
Regarding claim 3, claim 3 recites “wherein said first delay is
imposed for a group of machine readable media items which are high
demand items determined by the computing system.” The Examiner has not
supplied any explanation of how a description of requiring a customer to
return a new release movie the day after renting, in column 1, lines 12-29 of
Hastings, teaches the step of imposing a delay in delivering a movie. See
Answer 7. We find that the Appellant has overcome the rejection of claim 3,
and we reverse the rejections of claim 3.
Regarding claim 4, the Appellant makes no argument directed to
claim 4. See Answer 9. Accordingly, we shall sustain the rejection of claim
4 under 35 U.S.C. §103(a) as unpatentable over Hastings and Matsushima.
Regarding claim 5, claim 5 recites “a step: (d) measuring a number of
titles out for said subscriber relative to Nmax over a predetermined period.”
Hastings teaches that a “determination is made that the “Max Turns” limit
has been met for the current cycle, i.e., in the present example, four movies
512 have been mailed to customer 502 in the current month.” FF 6.
Therefore, we find that Hastings teaches step (d) of claim 5. We find that
the Appellant has not overcome the rejection of claim 5, and we sustain the
rejection of claim 5.
Regarding claim 6, claim 6 recites “further including a step (e):
adjusting said first delay based on results of step (d).” We fail to see how
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the passages cited by the Examiner, teaches the limitation of claim 6.
Further, the Examiner has not supplied any explanation of how these
passages teach the l description of requiring a customer to return a new
release movie the day after renting teaches the step of imposing a delay in
delivering a movie. See Answer 8. We find that the Appellant has
overcome the rejection of claim 6, and we reverse the rejection of claim 6.
Regarding claim 7, claim 7 recites “further including a step (d)
preemptively delivering a title to the first subscriber before it is requested.”
Hastings describes that delivery of an item can occur upon delivery criteria
being satisfied. FF 10. The delivery criteria can include items being
returned by the customer and the occurrence of specific date. FF 11. The
delivery of items using these criteria instead of a customer request would
preemptively deliver can preemptively deliver an item to a subscriber before
it is requested. Therefore, we find that Hastings teaches step (d) of claim 7.
We find that the Appellant has not overcome the rejection of claim 7, and we
sustain the rejection of claim 7.
To summarize, we find that the Appellant has not overcome the
rejections of claims 2, 4, 5, and 7 and we sustain the rejections of claims 2,
4, 5, and 7. However, since our reasoning differs from that of the Examiner
with regards to claim 2 and 5 (Cf. Answer 3-4 and 6-7), we designate our
decision as a new ground of rejection. We find that the Appellant has
overcome the rejections of claims 3 and 6 and we reverse the rejections of
claims 3 and 6.

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Claims 8-14
Independent claim 8 recites a method, which includes step “a)
evaluating a demand characteristic with a computing system for a first
machine readable media item requested by a first subscriber” and recites
“wherein an amount of said delay is based on a usage behavior of said first
subscriber, such that an amount of delay imposed varies in accordance with
said first subscriber’s allotment of titles provided during a predetermined
period.”
The Appellant argues that the Examiner failed to provide any
evidence of where these limitations are found in the cited prior art. App. Br.
9-10. In the Answer, the Examiner cites column 3, lines 7-20 of Hastings
and states: “Therefore, the rental mechanism of Hastings is capable of
evaluating [configuring if criteria being satisfied] demand with a computing
system by a first subscriber).” Answer 3. The Appellant responds that the
claimed step (a) “is clearly not the same as merely identifying that a title was
given to a subscriber.” Reply Br. 3.
We note that the Examiner does not provide any explanation as to
how Hastings teaches that an amount of delay imposed varies in accordance
with said first subscriber’s allotment of titles provided during a
predetermined period as required by claim 8. We find that Hastings does not
teaches that the amount of delay imposed on the delivery of the first machine
readable media items varies in accordance with the first subscriber’s
allotment of titles provided during a predetermined period. FF 16. Further,
the Examiner does not rely upon Matsushima to teach this limitation nor
does the Examiner cite any knowledge with the art to teach the limitation.
See Answer 3-6. Accordingly, we find that the Appellant has overcome the
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rejection of claim 8, and we reverse the rejection of claim 8, and claims 9-
14, dependent thereon, under 35 U.S.C. §103(a) as unpatentable over
Hastings and Matsushima

Claims 15-20
Independent claim 15 recites a method which includes: step (c)
measuring media usage behavior of said first subscriber; step (c’) using a
recommender to predict a second machine readable item likely to be
preferred by the first subscriber; and step (d) selectively imposing a delay on
delivery of said first machine readable media item to the first subscriber
based on the results of steps (b), (c) and (c’).
The Appellant argues that the “there is simply no evidence to sustain
the present rejection” and that the Examiner has not provided any
explanation as to how the cited references teach the limitations above. Br.
10-11. The Examiner does not respond to the Appellant’s argument. See
Answer 6-10. In the rejection when addressing claims 15-20, the Examiner
cites to the abstract; column 7, lines 39-42, column 1, lines 56-57, column 2,
lines 1-12, and column 6, lines 14-29 of Hastings to teach most of the
limitations of claim 15. Answer 5.
We find that Hastings does not teach step (d), where the selectively
imposing a delay on delivery is based on step (c’) along with steps (b) and
(c). While Hastings does teach that delivery can be delayed if the number of
exchanges per the time period exceeds the maximum number of exchanges
in the time period (FF 5-6) and does describe determining an item which a
user is likely to prefer (FF 8-9), Hastings does not teach that the delay is
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selectively imposed based on the result of determining a second item which
the user is likely to prefer along with steps (b) and (c).
Further, the Examiner does not rely upon Matsushima to teach this
limitation nor does the Examiner cite any knowledge with the art to teach the
limitation. See Answer 6. Accordingly, we find that the Appellant has
overcome the Examiner’s rejection of claim 15, and claims 16-20, dependent
thereon, under 35 U.S.C. § 103(a) as unpatentable over Hastings and
Matsushima.

NEW GROUND OF REJECTION
Pursuant to 37 C.F.R. 41.50(b), we enter a new grounds of rejection
on claims 1-20 under 35 U.S.C. § 101.
We reject claims 1-20 under 35 U.S.C. § 101 as being drawn to
nonpatentable subject matter. Taking claim 1 as representative, claim 1
recites a method of delivering machine readable media to subscribers of a
media rental service. The method includes steps (a)-(c). Claim 1 recites
steps and is thus nominally drawn to a process. However,
[T]he proper inquiry under § 101 is not whether
the process claim recites sufficient "physical
steps," but rather whether the claim meets the
machine-or-transformation test. As a result, even a
claim that recites "physical steps" but neither
recites a particular machine or apparatus, nor
transforms any article into a different state or
thing, is not drawn to patent-eligible subject
matter. Conversely, a claim that purportedly lacks
any "physical steps" but is still tied to a machine or
achieves an eligible transformation passes muster
under § 101.
In re Bilski, 545 F.3d 943, 961 (Fed. Cir. 2008) (en banc).
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Here, claim 1 is not tied to a particular machine or apparatus nor does
it transform a particular article into a different state or thing. Claim 1 recites
nothing that would transform a particular article into a different state or
thing. Further, claim 1 is not tied to a particular machine or apparatus. We
note that claim 1 does recite a “machine readable media.” However, the
machine readable media is not a machine or apparatus.
The Supreme Court has defined the term
“machine” as “a concrete thing, consisting of parts,
or of certain devices and combination of devices.”
Burr v. Duryee, 68 U.S. (1 Wall.) 531, 570 (1863).
This “includes every mechanical device or
combination of mechanical powers and devices to
perform some function and product a certain effect
or result.” Corning v. Burden, 56 U.S. 252, 267,
15 How. 252, 14 .Ed. 683 (1853).
In re Nuijiten, 500 F.3d 1346, 1355 (Fed. Cir. 2007). Further, the
Specification states “the term media item or playable media item is intended
to have its broadest meaning to include any machine readable media
readable (including software programs) by a subscriber machine . . .”
Specification 6:10-16 (emphasis added).
Therefore, we reject claims 1-20 under 35 U.S.C. § 101 as being
drawn to nonpatentable subject matter.

CONCLUSIONS OF LAW
We conclude that the Appellant has not overcome the rejection of
claims 1, 2, 4, 5, and 7 under 35 U.S.C. § 103(a) as being unpatentable over
Hastings and Matsushima. We designate our decision as to claims 1, 2, 4, 5,
and 7 as a new ground of rejection.
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We conclude that the Appellant has overcome the rejection of claims
3, 6, and 8-20 under 35 U.S.C. § 103(a) as being unpatentable over Hastings
and Matsushima.
We enter a new ground of rejection under 35 U.S.C. § 101 over claims
1-20.
DECISION
The decision of the Examiner to reject claims 1, 2, 4, 5, and 7 is
affirmed and we designate our decision as a new ground of rejection.
The decision of the Examiner to reject claims 3, 6, and 8-20 under 35
U.S.C. § 103(a) is reversed.
We also add a new ground of rejection to claims 1-20 under 35 U.S.C.
§ 101.
This decision contains a new ground of rejection pursuant to
37 C.F.R. § 41.50(b) (effective September 13, 2004, 69 Fed. Reg. 49960
(August 12, 2004), 1286 Off. Gaz. Pat. Office 21 (September 7, 2004)). 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 the Appellant, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, must exercise one of
the following two options with respect to the new ground 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 . . . .
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AFFIRMED-IN-PART; 37 C.F.R. § 41.50(b)

mev

LAW OFFICE OF J. NICHOLAS GROSS, PROF. CORP.
2030 ADDISON ST.,SUITE 610
BERKELEY CA 94704