Ex Parte Kwan

Board of Patent Appeals and Interferences

Oct 8, 2009

10214351 (B.P.A.I. Oct. 8, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
___________ 2
3
BEFORE THE BOARD OF PATENT APPEALS 4
AND INTERFERENCES 5
___________ 6
7
Ex parte KHAI HEE KWAN 8
___________ 9
10
Appeal 2009-002821 11
Application 10/214,351 12
Technology Center 3600 13
___________ 14
15
Decided: October 8, 2009 16
___________ 17
18
Before HUBERT C. LORIN, ANTON W. FETTING, and 19
BIBHU R. MOHANTY, Administrative Patent Judges. 20
21
FETTING, Administrative Patent Judge. 22
DECISION ON APPEAL 23
Appeal 2009-002821
Application 10/214,351

2
STATEMENT OF THE CASE 1
Khai Hee Kwan (Appellant) seeks review under 35 U.S.C. § 134 (2002) 2
of a final rejection of claims 1-7, 15-18, and 23-31, the only claims pending 3
in the application on appeal. 4
We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b) 5
(2002). 6
SUMMARY OF DECISION1 7
We AFFIRM-IN-PART. 8
THE INVENTION 9
The Appellant invented a way of incorporating a password on a bearer 10
financial instrument and proving ownership by requiring the legal user to 11
authenticate using that password over the network on presentation of the 12
instrument. The bearer instrument is a representation of the owner's 13
authority or rights and may include a machine readable unique identifier or 14
image to verify the legitimacy of the document (Specification 2:5-12). 15

1 Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed May 21, 2007) and Reply Brief (“Reply Br.,” filed October 24,
2007), and the Examiner’s Answer (“Ans.,” mailed October 24, 2007).
Appeal 2009-002821
Application 10/214,351

3
An understanding of the invention can be derived from a reading of 1
exemplary claim 1, which is reproduced below [bracketed matter and some 2
paragraphing added]. 3
1. A computer network method 4
for issuing and verifying a password protected 5
representation of economic value exchangeable for 6
money 7
using at least a programmed computer to avoid 8
acceptance of a fraudulent economic representation at the 9
point and time of transaction between a merchant and a 10
payee or bearer, 11
comprising the steps of: 12
[1] receiving for verification 13
a self-printed representation of economic value 14
having machine readable codes comprising at least 15
data identifying an [sic] unique 16
identification 17
linked to a password by payee or bearer; 18
[2] reading said machine readable codes 19
to derive said linked password; 20
[3] requesting from payee or bearer 21
a password to verify ownership of said representation; 22
[4] verifying ownership 23
by comparing said password presented by said payee or 24
bearer 25
with said password linked to said unique identifier; 26
[5] responding to said merchant with said verification result; 27
[6] determining by said merchant whether to accept or refuse 28
said representation 29
Appeal 2009-002821
Application 10/214,351

4
at the point and time of transaction based on said 1
ownership verification step; 2
[7] whereby [after] said merchant accepts then 3
exchanging predetermined amount of money in currency 4
notes with said representation or 5
crediting said predetermined amount of money to an 6
account designated by said payee or bearer; and 7
[8] whereupon [sic, where upon] acceptance, said 8
representation is expired. 9
THE REJECTIONS 10
The Examiner relies upon the following prior art: 11
Zingher US 5,731,575 Mar. 24, 1998
Martin US 6,390,362 B1 May 21, 2002
Kawai US 6,764,001 B1 Jul. 20, 2004
Claims 1 and 23 stand rejected under 35 U.S.C. § 101 as directed to 12
inoperative subject matter lacking utility. 13
Claims 1, 23, and 31 stand rejected under 35 U.S.C. § 112, first 14
paragraph, as lacking a supporting written description within the original 15
disclosure. 16
Claims 1 and 23 stand rejected under 35 U.S.C. § 112, second paragraph, 17
as failing to particularly point out and distinctly claim the invention. 18
Claims 1, 2, 4, 6, 7, 15, 16, 18, 23, 24, 26, and 28-31 stand rejected 19
under 35 U.S.C. § 102(e) as anticipated by Martin. 20
Claims 3, 17, and 25 stand rejected under 35 U.S.C. § 103(a) as 21
unpatentable over Martin and Kawai. 22
Appeal 2009-002821
Application 10/214,351

5
Claims 5 and 27 stand rejected under 35 U.S.C. § 103(a) as unpatentable 1
over Martin, Kawai, and Zingher. 2
3
ARGUMENTS 4
Claims 1 and 23 rejected under 35 U.S.C. § 101 as directed to inoperative 5
subject matter lacking utility. 6
The claims require deriving a password from a machine readable code. 7
The Examiner found that because the password was created during the 8
claimed transaction, it could not have been previously registered, so as to be 9
derived during the transaction. Ans. 3-4. The Appellant argued the 10
Examiner confused the claim and that these claims merely verify an existing 11
password rather than create a new password. 12
Claims 1, 23, and 31 rejected under 35 U.S.C. § 112, first paragraph, as 13
lacking a supporting written description within the original disclosure. 14
All three claims require the derivation of a password from a machine 15
readable code, as in the issue under 35 U.S.C. § 101 supra. The Examiner 16
found the Specification failed to disclose how to practice this.2 Ans. 4. The 17
Appellant argued, basically, as with the inoperability rejection, adding 18
further clarification, as to where the Specification supports the claims. App. 19
Br. 13-15. 20
The Examiner also found that, claim 31 contained new matter as detailed 21
in a claim chart. Ans. 4-6. The Appellant argued that the limitations found 22
Appeal 2009-002821
Application 10/214,351

6
to be new matter by the Examiner are either supported by the Specification 1
and drawings or by the knowledge of one of ordinary skill. App. Br. 16-20. 2
Claims 1 and 23 rejected under 35 U.S.C. § 112, second paragraph, as 3
failing to particularly point out and distinctly claim the invention. 4
Both claims contain the term “self printed” related to a representation 5
which the Examiner found to be ambiguous as to whether this literally 6
means a representation printed itself or was printed by the one performing 7
the steps. Ans. 7. The Appellant argued that, it is nonsensical to construe 8
“self printed” to mean a literal printing by a representation. App. Br. 24. 9
Claims 1, 2, 4, 6, 7, 15, 16, 18, 23, 24, 26, and 28-31 rejected under 35 10
U.S.C. § 102(e) as anticipated by Martin. 11
Claims 3, 17, and 25 rejected under 35 U.S.C. § 103(a) as unpatentable over 12
Martin and Kawai. 13
Claims 5 and 27 rejected under 35 U.S.C. § 103(a) as unpatentable over 14
Martin, Kawai, and Zingher. 15
Claims 1, 23, and 31 are the only independent claims. All three claims 16
require deriving a password from a machine readable identifier or bar code. 17
The Examiner found that the data input, entered by the holder of the 18
representation, derived the password. Ans. 8. The Appellant argued this 19
cannot be the password that is linked to the machine readable code, because 20
then there would be no separate password to compare to as required by the 21
claim. App. Br. 29. 22

2 Technically, the Examiner’s finding was lack of enablement rather than
written description.
Appeal 2009-002821
Application 10/214,351

7
ISSUES 1
The issue of whether the Appellant has sustained its burden of showing 2
that the Examiner erred in rejecting claims 1 and 23 under 35 U.S.C. § 101 3
as directed to inoperative subject matter lacking utility turns on whether the 4
claims require creating a new password. 5
The issue of whether the Appellant has sustained its burden of showing 6
that the Examiner erred in rejecting claims 1, 23, and 31, under 35 U.S.C. § 7
112, first paragraph, as lacking a supporting written description within the 8
original disclosure, turns on the outcome of the rejection due to inoperability 9
and on whether it is sufficient to show that one of ordinary skill knew the 10
subject matter of claim limitations, not supported in the originally filed 11
disclosure, show possession of the invention. 12
The issue of whether the Appellant has sustained its burden of showing 13
that the Examiner erred in rejecting claims 1 and 23 under 35 U.S.C. § 112, 14
second paragraph, as failing to particularly point out and distinctly claim the 15
invention, turns on whether one of ordinary skill would understand that 16
something self-printed is printed by the person desiring the printing and not 17
printed by the document that is printed. 18
The issue of whether the Appellant has sustained its burden of showing 19
that the Examiner erred in rejecting claims 1, 2, 4, 6, 7, 15, 16, 18, 23, 24, 20
26, and 28-31 under 35 U.S.C. § 102(e) as anticipated by Martin, turns on 21
whether Martin describes the password derivation as claimed. 22
The issue of whether the Appellant has sustained its burden of showing 23
that the Examiner erred in rejecting claims 3, 17, and 25 under 35 U.S.C. § 24
103(a) as unpatentable over Martin and Kawai, as well as claims 5 and 27 25
Appeal 2009-002821
Application 10/214,351

8
under 35 U.S.C. § 103(a) as unpatentable over Martin, Kawai, and Zingher, 1
turns on the anticipation rejection. 2
3
FACTS PERTINENT TO THE ISSUES 4
The following enumerated Findings of Fact (FF) are believed to be 5
supported by a preponderance of the evidence. 6
Facts Related to the Prior Art 7
Martin 8
01. Martin is directed to preventing check fraud by verifying a 9
checking account customer’s personal identification number (PIN) 10
and printing the account number, bank routing number, amount of 11
the check, date of the check, account owner, and payee 12
information onto the check in bar code format; as well as entering 13
the personal identification number to uniquely identify the account 14
owner, thereby authorizing payment for the check. Martin 4:5-19. 15
02. Martin describes how to use the checks at a retail store, or any 16
other place where the check is written away from the customer's 17
home or business. The customer must enter a personal 18
identification number (PIN) into a keypad located at the checkout 19
counter. The PIN is a unique number that identifies the person 20
entering the number is the owner of the checking account. Martin 21
10:27-39. 22
23
24
Appeal 2009-002821
Application 10/214,351

9
Facts Related To Differences Between The Claimed Subject Matter And 1
The Prior Art 2
03. Martin does not show retrieving or otherwise deriving a 3
password from a machine readable code on a check. 4
PRINCIPLES OF LAW 5
Utility - Inoperability 6
Whoever invents or discovers any new and useful process, 7
machine, manufacture, or composition of matter, or any new 8
and useful improvement thereof, may obtain a patent therefor, 9
subject to the conditions and requirements of this title. 10
35 U.S.C. § 101. 11
An invention that is "inoperative" (i.e., it does not operate to produce the 12
results claimed by the patent applicant) is not a "useful" invention in the 13
meaning of the patent law. See, e.g., Newman v. Quigg, 877 F.2d 1575, 14
1581 (Fed. Cir. 1989); In re Harwood, 390 F.2d 985, 989 (CCPA 1968) 15
("An inoperative invention, of course, does not satisfy the requirement of 35 16
U.S.C. 101 that an invention be useful."). However, as the Federal Circuit 17
has stated, "[t]o violate [35 U.S.C.] 101 the claimed device must be totally 18
incapable of achieving a useful result." Brooktree Corp. v. Advanced Micro 19
Devices, Inc., 977 F.2d 1555, 1571 (Fed. Cir. 1992) (emphasis added). 20
Written Description 21
The first paragraph of 35 U.S.C. § 112 requires that the specification 22
shall contain a written description of the invention. This requirement is 23
separate and distinct from the enablement requirement. See, e.g., Vas-Cath, 24
Inc. v. Mahurkar, 935 F.2d 1555, 1563-64 (Fed. Cir. 1991). 25
Appeal 2009-002821
Application 10/214,351

10
The “written description” requirement implements the principle 1
that a patent must describe the technology that is sought to be 2
patented; the requirement serves both to satisfy the inventor's 3
obligation to disclose the technologic knowledge upon which 4
the patent is based, and to demonstrate that the patentee was in 5
possession of the invention that is claimed. 6
One shows that one is “in possession” of the invention by 7
describing the invention, with all its claimed limitations, not 8
that which makes it obvious. [Vas-Cath Inc. v. Mahurkar, 935 9
F.2d 1555, 1563-64 (Fed. Cir. 1991)] (“[T]he applicant must 10
also convey to those skilled in the art that, as of the filing date 11
sought, he or she was in possession of the invention. The 12
invention is, for purposes of the ‘written description’ inquiry, 13
whatever is now claimed.”) (emphasis in original). One does 14
that by such descriptive means as words, structures, figures, 15
diagrams, formulas, etc., that fully set forth the claimed 16
invention. Although the exact terms need not be used in haec 17
verba, See Eiselstein v. Frank, 52 F.3d 1035, 1038 . . . 18
(Fed.Cir.1995) (“[T]he prior application need not describe the 19
claimed subject matter in exactly the same terms as used in the 20
claims . . . . ”), the specification must contain an equivalent 21
description of the claimed subject matter. 22
Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997) 23
It is the disclosures of the applications that count. Entitlement 24
to a filing date does not extend to subject matter which is not 25
disclosed, but would be obvious over what is expressly 26
disclosed. It extends only to that which is disclosed. While the 27
meaning of terms, phrases, or diagrams in a disclosure is to be 28
explained or interpreted from the vantage point of one skilled in 29
the art, all the limitations must appear in the specification. The 30
question is not whether a claimed invention is an obvious 31
variant of that which is disclosed in the specification. Rather, 32
[an] application itself must describe an invention, and do so in 33
sufficient detail that one skilled in the art can clearly conclude 34
that the inventor invented the claimed invention as of the filing 35
date sought. 36
id at 1571-72. 37
Appeal 2009-002821
Application 10/214,351

11
Indefiniteness 1
Under 35 U.S.C. § 112, ¶ 2, the claims of a patent must “particularly 2
point[ ] out and distinctly claim[ ] the subject matter which the applicant 3
regards as his invention.” “A claim is considered indefinite if it does not 4
reasonably apprise those skilled in the art of its scope.” IPXL Holdings, 5
L.L.C. v. Amazon.com, Inc., 430 F.3d 1377, 1383–84 (Fed. Cir. 2005). 6
Anticipation 7
"A claim is anticipated only if each and every element as set forth in the 8
claim is found, either expressly or inherently described, in a single prior art 9
reference." Verdegaal Bros. v. Union Oil Co. of California, 814 F.2d 628, 10
631 (Fed. Cir. 1987). "When a claim covers several structures or 11
compositions, either generically or as alternatives, the claim is deemed 12
anticipated if any of the structures or compositions within the scope of the 13
claim is known in the prior art." Brown v. 3M, 265 F.3d 1349, 1351 (Fed. 14
Cir. 2001). "The identical invention must be shown in as complete detail as 15
is contained in the ... claim." Richardson v. Suzuki Motor Co., 868 F.2d 16
1226, 1236 (Fed. Cir. 1989). The elements must be arranged as required by 17
the claim, but this is not an ipsissimis verbis test, i.e., identity of terminology 18
is not required. In re Bond, 910 F.2d 831, 832 (Fed. Cir. 1990). 19
Obviousness 20
A claimed invention is unpatentable if the differences between it and 21
the prior art are “such that the subject matter as a whole would have been 22
obvious at the time the invention was made to a person having ordinary skill 23
in the art.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007); Graham 24
v. John Deere Co., 383 U.S. 1, 13-14 (1966). 25
Appeal 2009-002821
Application 10/214,351

12
In Graham, the Court held that that the obviousness analysis is 1
bottomed on several basic factual inquiries: “[(1)] the scope and content of 2
the prior art are to be determined; [(2)] differences between the prior art and 3
the claims at issue are to be ascertained; and [(3)] the level of ordinary skill 4
in the pertinent art resolved.” Graham, 383 U.S. at 17. See also KSR, 550 5
U.S. at 406. “The combination of familiar elements according to known 6
methods is likely to be obvious when it does no more than yield predictable 7
results.” Id. at 416. 8
9
ANALYSIS 10
Claims 1 and 23 rejected under 35 U.S.C. § 101 as directed to inoperative 11
subject matter lacking utility. 12
These claims require deriving a linked password. The Examiner 13
construed this as, requiring creation of a new password. The claims do not 14
recite creation of new passwords. Apparently the Examiner interpreted the 15
word “deriving” as meaning creating anew. However, the claim merely 16
derives an existing password that is linked to the coding claimed and then 17
compares the derived password to the stored version. There is nothing 18
contradictory that would render the claims inoperable in this. Accordingly, 19
the Examiner erred in rejecting these claims as inoperable. 20
Claims 1, 23, and 31 rejected under 35 U.S.C. § 112, first paragraph, as 21
lacking a supporting written description within the original disclosure. 22
Appeal 2009-002821
Application 10/214,351

13
As to these three claims, the Examiner’s findings are simply implications 1
of the inoperability rejections supra, and the rejection is in error for the same 2
reason. 3
As to claim 31 and new matter, the Examiner recites six claim 4
limitations that are not supported by the original disclosure. Claim 31 was 5
not in the original July 28, 2002 filing, but was added by amendment June 6
23, 2006. 7
The Appellant’s arguments that one of ordinary skill knew of those 8
portions not supported may show enablement, but cannot show possession 9
of the invention. The Appellant has effectively argued that one of ordinary 10
skill would have found those limitations to be obvious from the disclosure. 11
Possession cannot be shown by obviousness, however. See Lockwood v. 12
Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997). Thus, we are 13
persuaded that the limitations in the Examiner’s chart of claim 31 are new 14
matter not supported by the original disclosure. 15
Claims 1 and 23 rejected under 35 U.S.C. § 112, second paragraph, as 16
failing to particularly point out and distinctly claim the invention. 17
The Examiner found the term “self-printed” referred to an ambiguous 18
representation. The Examiner did not see that it was clear whether the “self” 19
was the representation or the person performing the steps. We are persuaded 20
by the Appellant’s argument that no one of ordinary skill would read the 21
limitation as, being that a document prints itself. It must be the operator him 22
or herself that prints. Thus, we are persuaded that the Examiner erred in this 23
rejection. 24
Appeal 2009-002821
Application 10/214,351

14
1
Claims 1, 2, 4, 6, 7, 15, 16, 18, 23, 24, 26, and 28-31 rejected under 35 2
U.S.C. § 102(e) as anticipated by Martin. 3
Claims 3, 17, and 25 rejected under 35 U.S.C. § 103(a) as unpatentable over 4
Martin and Kawai. 5
Claims 5 and 27 rejected under 35 U.S.C. § 103(a) as unpatentable over 6
Martin, Kawai, and Zingher. 7
All independent claims require deriving a password that is linked to a 8
machine readable code, and that this derived password, be separate from a 9
password entered by the bearer of the document having the code. The 10
Examiner found that Martin requires the bearer to enter a password. Ans. 8. 11
See FF 02. The Examiner found that this creates a linkage between Martin’s 12
barcode and the password because the bearer is asked to enter the password. 13
Ans. 12. This does not respond to the Appellant’s argument that two 14
separate retrievals of a password are required by the independent claims. 15
Martin does not show retrieving or otherwise deriving a password from a 16
machine readable code on a check. FF 03. Thus, we are persuaded that the 17
Examiner erred in finding that Martin anticipated the two password 18
retrievals in the independent claims. Neither of the secondary references 19
remedies this deficiency in the claims rejected for obviousness. 20
21
Appeal 2009-002821
Application 10/214,351

15
CONCLUSIONS OF LAW 1
The Appellant has sustained its burden of showing that the Examiner 2
erred in rejecting claims 1 and 23 under 35 U.S.C. § 101 as directed to 3
inoperative subject matter lacking utility. 4
The Appellant has sustained its burden of showing that the Examiner 5
erred in rejecting claims 1 and 23 under 35 U.S.C. § 112, first paragraph, as 6
lacking a supporting written description within the original disclosure. 7
The Appellant has not sustained its burden of showing that the Examiner 8
erred in rejecting claim 31 under 35 U.S.C. § 112, first paragraph, as lacking 9
a supporting written description within the original disclosure. 10
The Appellant has sustained its burden of showing that the Examiner 11
erred in rejecting claims 1 and 23 under 35 U.S.C. § 112, second paragraph, 12
as failing to particularly point out and distinctly claim the invention. 13
The Appellant has sustained its burden of showing that the Examiner 14
erred in rejecting claims 1, 2, 4, 6, 7, 15, 16, 18, 23, 24, 26, and 28-31 under 15
35 U.S.C. § 102(e) as anticipated by Martin. 16
The Appellant has sustained its burden of showing that the Examiner 17
erred in rejecting claims 3, 17, and 25 under 35 U.S.C. § 103(a) as 18
unpatentable over Martin and Kawai. 19
The Appellant has sustained its burden of showing that the Examiner 20
erred in rejecting claims 5 and 27 under 35 U.S.C. § 103(a) as unpatentable 21
over Martin, Kawai, and Zingher. 22
23
DECISION 24
Appeal 2009-002821
Application 10/214,351

16
To summarize, our decision is as follows. 1
• The rejection of claims 1 and 23 under 35 U.S.C. § 101 as directed to 2
inoperative subject matter lacking utility is not sustained. 3
• The rejection of claims 1 and 23 under 35 U.S.C. § 112, first 4
paragraph, as lacking a supporting written description within the 5
original disclosure is not sustained. 6
• The rejection of claim 31 under 35 U.S.C. § 112, first paragraph, as 7
lacking a supporting written description within the original disclosure 8
is sustained. 9
• The rejection of claims 1 and 23 under 35 U.S.C. § 112, second 10
paragraph, as failing to particularly point out and distinctly claim the 11
invention is not sustained. 12
• The rejection of claims 1, 2, 4, 6, 7, 15, 16, 18, 23, 24, 26, and 28-31 13
under 35 U.S.C. § 102(e) as anticipated by Martin is not sustained. 14
• The rejection of claims 3, 17, and 25 under 35 U.S.C. § 103(a) as 15
unpatentable over Martin and Kawai is not sustained. 16
• The rejection of claims 5 and 27 under 35 U.S.C. § 103(a) as 17
unpatentable over Martin, Kawai, and Zingher is not sustained. 18
No time period for taking any subsequent action in connection with this 19
appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). 20
21
AFFIRMED-IN-PART 22
23
Appeal 2009-002821
Application 10/214,351

17
1
2
mev 3
4
Address 5
KHAI HEE KWAN 6
123 BUNNERONG RD 7
KINGSFORD 2031 AU AUSTRALIA 8