Ex Parte Heath

Board of Patent Appeals and Interferences

Jan 11, 2012

11112288 (B.P.A.I. Jan. 11, 2012)

UNITED STATES PATENT AND TRADEMARK OFFICE
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.
11/112,288 04/21/2005 Juan X. Heath 3115.2.1NP 5708
7590 01/12/2012
Starkweather and Associates
Suite 200
9035 South 1300 East
Sandy, UT 84094
EXAMINER
AMSDELL, DANA
ART UNIT PAPER NUMBER
3627
MAIL DATE DELIVERY MODE
01/12/2012 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 BOARD OF PATENT APPEALS
AND INTERFERENCES
____________

Ex parte JUAN X. HEATH
____________

Appeal 2010-011485
Application 11/112,288
Technology Center 3600
____________

Before: ANTON W. FETTING, BIBHU R. MOHANTY, and
MICHAEL W. KIM, Administrative Patent Judges.

KIM, Administrative Patent Judge.

DECISION ON APPEAL
Appeal 2010-011485
Application 11/112,288

2
STATEMENT OF THE CASE
This is an appeal from the final rejection of claims 1-16. We have
jurisdiction to review the case under 35 U.S.C. §§ 134 and 6.
The claimed invention is directed to improving “lean thinking”
methods for inventory control, and to choosing inventory lot sizes (Spec.
[0002]). Claim 1, reproduced below, is further illustrative of the claimed
subject matter.

1. A method of optimizing an inventory lot
size wherein a computer-readable medium storing
a program that when executed, causes a computer
to perform steps adapted to optimize inventory lot
size, comprising:
a) determining fixed and variable costs
associated with a given lot size;
b) determining a sale price associated with
said given lot size;
c) determining a profit margin (PM) based
on the results in a) and b);
d) determining an average inventory level
(AIL) through calculation on a computer;
e) determining a cost of carrying inventory
(CCI) associated with said given lot size;
f) determining a net present value (NPV)
based on a predetermined mathematical
relationship between the determined PM, AIL and
CCI;
g) determining NPV changes (ANPV) with
incremental changes in lot size; and
h) determining an optimal lot size based on
the results in g).

Claim 1 stands rejected under 35 U.S.C. § 112, second paragraph, for
indefiniteness; claims 1, 8, 9, and 16 stand rejected under 35 U.S.C. § 102(b)
Appeal 2010-011485
Application 11/112,288

3
as anticipated by Baseman (US 7,363,259 B2, iss. Apr. 22, 2008); claims 2,
4, and 10-12 stand rejected under 35 U.S.C. § 103(a) as unpatentable over
Baseman in view of Official Notice; and claims 3, 5-7, and 13-15 stand
rejected under 35 U.S.C. § 103(a) as unpatentable over Baseman in view of
Dulaney (US 6,341,269, iss. Jan. 22, 2002).
We REVERSE.

ISSUES
Did the Examiner err in rejecting independent claim 1 under 35
U.S.C. § 112, second paragraph, indefiniteness? The issue turns on whether
independent claim 1 impermissibly claims both an apparatus and a method.
Did the Examiner err in asserting that Baseman anticipates
“determining an average inventory level (AIL) through calculation on a
computer,” as recited in independent claim 11?

ANALYSIS
112 Rejection
We are persuaded the Examiner erred in rejecting independent claim 1
under 35 U.S.C. § 112, second paragraph, for indefiniteness (App. Br. 12-
13). We agree with the Examiner that the recitation of “a computer-readable
medium” and “a computer” in the preamble is a bit confusing. However, the
recitation of “[a] method” in the preamble, coupled with the recitation solely
of method steps in the body of the claim, makes it sufficiently clear to one of
ordinary skill that a method is being claimed, and that the above recitations

1 We choose independent claim 1 as representative of independent claims 1
and 9, pursuant to our authority under 37 C.F.R. § 41.37(c)(1)(vii).
Appeal 2010-011485
Application 11/112,288

4
of structure are directed solely to implementation of the method. See
Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1366,
(Fed. Cir. 2004) (internal citations omitted) (“[t]he requirement to
‘distinctly’ claim means that the claim must have a meaning discernible to
one of ordinary skill in the art when construed according to correct
principles. Only when a claim remains insolubly ambiguous without a
discernible meaning after all reasonable attempts at construction must a
court declare it indefinite”).

103 Rejection
We are persuaded the Examiner erred in asserting that Baseman
anticipates “determining an average inventory level (AIL) through
calculation on a computer,” as recited in independent claim 1 (App. Br. 19,
27). The Examiner cites column 5, lines 51-52 and column 6, lines 55-59 of
Baseman as disclosing these aspects (Exam’r’s Ans. 6, 11-12). The cited
portion of Baseman does disclose calculating “strike prices (inventory
quantities) that minimize cost for the given service or maximize service”
(col. 6, ll. 55-57). However, there are several problems with the Examiner’s
rejection.
Initially, independent claim 1 recites average inventory level, while
the cited portion of Baseman only discloses inventory quantities. The
Examiner then asserts that the cited portion of “Baseman teaches this
limitation with a calculation solving for inventory quantity associated with
cost. Working back through the equation and re-arranging the terms, will
solve the limitation of the claim average inventory level in the units of
average ‘quantity’” (Exam’r’s Ans. 12). However, the Examiner has not set
Appeal 2010-011485
Application 11/112,288

5
forth which of the variables in referenced “Problems 2, 2.a, 2.b, 2.c, or 5”
corresponds to AIL. Furthermore, even if one of the variables does
correspond to AIL, the inventory quantities in the cited portion of Baseman
are for prospective inventory quantities, i.e., ideal levels for future inventory.
However, the context of independent claim 1 shows that the recited
determining of average inventory level is retrospective, as that data is later
used in steps f)-h) to determine an optimal lot size. See Phillips v. AWH
Corp., 415 F.3d 1303, 1314 (Fed. Cir. 2005) (internal citations omitted)
(“[q]uite apart from the written description and the prosecution history, the
claims themselves provide substantial guidance as to the meaning of
particular claim terms. To begin with, the context in which a term is used in
the asserted claim can be highly instructive”); ACTV, Inc. v. Walt Disney
Co., 346 F.3d 1082, 1088 (Fed. Cir. 2003) (“the context of the surrounding
words of the claim also must be considered in determining the ordinary and
customary meaning of those terms”).
Finally, the Examiner cites Inventory Management Review
(hereinafter “IMR”) for disclosing AIL (Final Rejection mailed September
14, 2009, pp. 2-4; Exam’r’s Ans. 12). However, there are several problems
with this citation. First, independent claim 1 is rejected under 35 U.S.C.
§ 102(b). Accordingly, the citation of an additional reference is improper.
Second, even if we assume that IMR is solely cited to provide a definition
for AIL, and even if we accept that definition, the Examiner still has not
shown that Baseman discloses even that definition of AIL for the reasons set
forth above.

Appeal 2010-011485
Application 11/112,288

6
DECISION
The rejection of claims 1-16 is REVERSED.

REVERSED

Klh