Ex Parte Herr et al

Board of Patent Appeals and Interferences

Aug 29, 2012

11488317 (B.P.A.I. Aug. 29, 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.
11/488,317 07/18/2006 Daniel P. Herr 37168/83030 8243
7590 08/30/2012
Barnes & Thornburg LLP
600 One Summit Square
Fort Wayne, IN 46802
EXAMINER
MARCUS, LELAND R
ART UNIT PAPER NUMBER
3684
MAIL DATE DELIVERY MODE
08/30/2012 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 DANIEL P. HERR and ROBERT J. TOTH 1
____________________

Appeal 2011-004736
Application 11/488,317
Technology Center 3600
____________________
Before, MURRIEL E. CRAWFORD, BIBHU R. MOHANTY, and
KEVIN F. TURNER, Administrative Patent Judges.

TURNER, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF CASE2
Appellants appeal under 35 U.S.C. § 134 from a final rejection of
claims 53-77. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM-IN-PART.

1 Lincoln National Life Insurance Company is the real party in interest.
2 Our decision will make reference to the Appellants’ Appeal Brief (“App.
Br.,” filed August 18, 2010), Reply Brief (“Reply Br.,” filed January 10,
2011), and the Examiner’s Answer (“Ans.,” mailed November 10, 2010).
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Application No. 11/488,317

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THE INVENTION
Appellants’ disclosure relates to a system for administering lifetime
income distributions from employer-sponsored retirement plans. (Spec. 2, ll.
10-12.)
Claim 53, reproduced below, is illustrative of the claimed subject
matter:
53. A computer-implemented method for use with a computer of
the type used to administer an employer-sponsored, defined
contribution retirement plan having participant account
balances, comprising the steps of:
providing options to a plan participant to elect a lifetime payout
funded by at least a portion of the participant’s account balance,
said options including an option to elect lifetime payments paid
through the plan, and an option to elect lifetime payments paid
through a Plan Distributed Annuity (“PDA”); and
using the computer:
inputting a lifetime payout election by a participant, said election
including either said election for lifetime payments paid
through the plan, or for lifetime payments paid through the
PDA;
for each plan participant electing a lifetime payout, importing and
storing participant data from the plan, said data including data
representative of said portion of the participant’s account
balance funding the lifetime payout;
creating and storing a lifetime payout record for said participant;
using said portion of the participant’s account balance,
computing an amount of a periodic benefit payment under the
elected lifetime payout; and
if a PDA is elected by the plan participant or administrator:
generating an instruction to withdraw said portion of the
participant’s account balance to purchase a PDA; and
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generating an instruction to modify the participant’s payout
record to reflect purchase of the PDA; and
if a PDA is not elected:
establishing an account within the plan for paying periodic
distributions to the participant in response to the election of a
lifetime payout;
periodically retrieving the plan participant’s lifetime payout
record from storage;
generating an instruction to pay the lifetime payout benefit
payment from the account established within the plan; and
recording the payment in the participant’s lifetime payout record
and re-storing said record.
(App. Br., Claims Appendix 33.)

PRIOR ART REJECTION
The prior art reference relied upon by the Examiner in rejecting the
claims is:
Fay 2002/0188540 A1 Dec. 12, 2002

The Examiner rejected claims 53-77 under 35 U.S.C. § 103(a) as
unpatentable over Fay and Official Notice.3

3 The Examiner withdrew an additional rejection of claim 69 under
35 U.S.C. § 112, second paragraph. (See Ans. 4.)
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Application No. 11/488,317

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ISSUE4
Does the combination of Fay and Official Notice teach or suggest the
subject matter of claims 53-77 under 35 U.S.C. § 103(a)?

FINDINGS OF FACT
1. Appellants’ Specification states that a “Plan Distributed Annuity”
(PDA) is an immediate annuity or deferred annuity computed in the same
manner as benefits that remain integrated with an employer’s plan, but
administered by an insurance company rather than the employer. (P. 14, l.
18 – p. 15, l. 8.)
2. Fay is directed to a portable retirement investment system for
providing a user with a plurality of periodic retirement income payments,
and at a designated time, after the end of an accumulation period,
transmitting the retirement income amount to the user. (Abs.)
3. Fay describes a variable deferred annuity contract which allows the
user to decide how their premium payment will be allocated among a
specific menu of investment vehicles or sub-accounts offered by an insurer.
(¶ [0031].)
4. Fay states that “[p]ayout options may include a lump sum payment,
a plurality of periodic payments, income for a remainder of the user’s life, or
a plurality of income payments paid out over a certain period of time.”
(¶ [0027].)

4 We have considered in this decision only those arguments that Appellants
actually raised in the Briefs. Arguments which Appellants could have made
but chose not to make in the Briefs are deemed to be waived. See 37 C.F.R.
§ 41.37(c)(1)(vii).
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Claims 53-77 rejected under 35 U.S.C. § 103(a) as unpatentable over
Fay and Official Notice.
Independent claim 53
Appellants argue that the combination of Fay and Official Notice fails
to teach or suggest the step of “providing options to a plan participant to
elect a lifetime payout funded by at least a portion of the participant’s
account balance, said options including an option to elect lifetime payments
paid through the plan, and an option to elect lifetime payments paid through
a Plan Distributed Annuity,” as recited by independent claim 53. (App. Br.
11-12; Reply Br. 2-3.) Specifically, Appellants assert that Fay provides a
single portable retirement annuity which does not provide a plan participant
with options for electing the source of the lifetime payout. (App. Br. 16.)
We are not persuaded by Appellants’ argument and agree with the
Examiner that the combination of Fay and Official Notice teaches or
suggests the subject matter of independent claim 53. In making this
determination, we find that Fay teaches a portable retirement investment
system which includes an annuity corresponding to the Plan Distributed
Annuity (PDA) recited by independent claim 53. (FF 1, 2.) Specifically,
Fay describes a variable deferred annuity contract which allows a user to
decide how their premium payment will be allocated among a specific menu
of investment vehicles or sub-accounts offered by an insurer. (FF 3.)
Additionally, Fay describes that its annuity may be paid out as income for a
remainder of the user’s life. (FF 4.)
While Appellants are correct that Fay describes an annuity (i.e.,
retirement plan) administered by an insurer, which is not the same as an
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employer-sponsored retirement plan, the Examiner took Official Notice “that
buying from a middleman is old and well known in the art.” (Ans. 6.)
Specifically, the Examiner states that “Fay teaches the steps and procedures
for financial institution ‘A’ to create an annuity. The PDA of the instant
case is the purchase of an annuity offered by a different institution ‘B,’ with
institution ‘A’ simply serving as a middleman.” (Ans. 6.)
We agree with the Examiner that employer-sponsored defined
contribution retirement plans are routinely offered and managed by third-
party firms. Moreover, Appellants’ Specification describes that a PDA is an
immediate annuity or deferred annuity computed in the same manner as
benefits that remain integrated with an employer’s plan, but administered by
an insurance company rather than the employer. (FF 1.) Thus, we find that
one of ordinary skill art would have understood Fay’s variable deferred
annuity contract to teach a defined contribution retirement plan and its
different investment vehicles and sub-accounts to teach another plan or
option corresponding to Appellants’ PDA. (FF 3.) Accordingly, we find the
combination of Fay and Official Notice renders obvious the step of
“providing options to a plan participant to elect a lifetime payout funded by
at least a portion of the participant’s account balance, said options including
an option to elect lifetime payments paid through the plan, and an option to
elect lifetime payments paid through a Plan Distributed Annuity,” as
presently recited by claim 53.
Additionally, Appellants argue that the combination of Fay and
Official Notice fails to teach or suggest inputting a lifetime payout election
made by a participant since Fay fails to teach or suggest a “plurality of
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options for providing a user with lifetime payments.” (App. Br. 14.) We are
not persuaded by Appellants’ argument and as discussed supra find that
Fay’s variable deferred annuity provides plan participants with a menu of
investment vehicles which are payable as lifetime payments. (FF 3, 4.)
Thus, we find the combination of Fay and Official Notice teaches or
suggests the step of inputting a lifetime payout election, as generally recited
by claim 53.
Additionally, Appellants argue that the combination of Fay and
Official Notice fails to teach or suggest “the steps of generating an
instruction to withdraw a designated portion of a participant’s account
balance in an employer-sponsored, defined contribution retirement plan, and
generating an instruction to modify the participant’s payout record to reflect
purchase of the PDA,” as generally recited by claim 53. (App. Br. 17; Reply
Br. 3-4.)
We are not persuaded by Appellants’ argument and find that in order
for a user to choose from the menu of investment vehicles in Fay, Fay’s
variable deferred annuity would generate instructions to withdraw and
modify the participant’s payout record accordingly in order to account for
these choices and their ultimate payouts and returns. (FF 2, 3, 4.) While
Fay’s disclosure may not explicitly detail this accounting, we agree with the
Examiner that one of ordinary skill in the art at the time of the invention
would have found these steps to be nothing more than ordinary record
keeping activities, and as such, obvious. (See Ans. 6.) Where, an
application claims a structure already known in the prior art that is altered by
the mere substitution of one element for another known in the field, the
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combination must do more than yield a predictable result. KSR Int’l Co. v.
Teleflex Inc., 550 U.S. 398, 416 (2007) (citing United States v. Adams, 383
U.S. 50-51 (1966)).
Accordingly, we sustain the Examiner’s rejection of claim 53 under
35 U.S.C. § 103(a) as unpatentable over Fay and Official Notice.

Claims 54-67, 70, 71, and 73-77
Appellants do not separately argue claims 54-67, 70, 71, and 73-77,
which depend from independent claim 53, and so we sustain the rejection of
these claims under 35 U.S.C. § 103(a) as unpatentable over Fay and Official
Notice for the same reasons we found as to claim 53 supra.

Claims 68 and 69
Appellants argue that the combination of Fay and Official Notice fails
to teach or suggest the step of “permitting the plan participant to select
investment options for said portion of the participants account balance,” as
recited by claim 68. (App. Br. 21; Reply Br. 6.) Specifically, Appellants
assert that “Fay does not allow the user of his system to direct investment of
the premiums into stocks, bonds, or other options which might typically be
available in an employer-sponsored DC plan.” (App. Br. 22.) Claim 69
depends on claim 68 and recites similar subject matter. (App. Br. 23.)
We are not persuaded by Appellants’ argument and as discussed supra
find Fay’s variable deferred annuity provides plan participants with a menu
of investment vehicles which are payable as lifetime payments. (FF 3, 4.)
Fay describes that its plan participants are able to allocate their investment
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among these investment vehicles, and as such, we find that that Fay permits
its plan participants to select investment options, as presently claimed.
While Appellants set forth various considerations such as the type of
stocks, bonds, or other options in which may be available in a specific plan,
we do not find any of these considerations to be set forth in the claims. See
CollegeNet, Inc. v. ApplyYourself, Inc., 418 F.3d 1225, 1231 (Fed. Cir.
2005) (while the specification can be examined for proper context of a claim
term, limitations from the specification will not be imported into the claims).
Thus, we are not persuaded by Appellants arguments.
Accordingly, we sustain the Examiner’s rejection of claims 68 and 69
under 35 U.S.C. § 103(a) as unpatentable over Fay and Official Notice.

Claim 72
Appellants argue that the combination of Fay and Official Notice fails
to teach or suggest “the steps of providing funding and administration of
benefit payments under the lifetime payout outside of an annuity contract
during a first specified period,” as recited by claim 72. (App. Br. 23.)
Specifically, Appellants assert that the Examiner’s improperly interprets
“benefit payments” as administrative fees. (App. Br. 25; Reply Br. 7.)
In response, the Examiner states:
while Fay teaches various service fees (paragraph 74),
Fay does not specifically teach providing funding and
administration of benefits under the lifetime payout
outside of an annuity contract during a first specified
period. However, administration fees are old and well
known in the art, and the Examiner takes official notice
that it would be obvious to one skilled in the art at the
time of the invention to modify Fay to assess
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management fees against participant account balances in
order to pay for administrative expenses associated with
maintaining the account.
(Ans. 9.)
We agree with Appellants that the Examiner has improperly
interpreted claim 72 to require a teaching of administrative fees. Therefore,
since the Examiner fails to show a teaching or suggesting in Fay or Official
Notice which “provid[es] funding and administration of benefit payments
under the lifetime payout outside of an annuity contract during a first
specified period,” Appellants have persuaded us that the Examiner erred in
relying on Fay and Official Notice to address the instant limitation.
Accordingly, we cannot sustain the Examiner’s rejection of claim 72
under 35 U.S.C. § 103(a) as unpatentable over Fay and Official Notice.

CONCLUSION
We conclude that the combination of Fay and Official Notice teaches
or suggests the subject matter of claims 53-71 and 73-77, but does not teach
or suggest the subject matter of claim 72 under 35 U.S.C. § 103(a).

DECISION
We affirm the Examiner’s rejection of claims 53-71 and 73-77 under
35 U.S.C. § 103(a) and reverse the Examiner’s rejection of claim 72 under
35 U.S.C. § 103(a).
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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).

AFFIRMED-IN-PART

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