Ex Parte Nicholson

Patent Trial and Appeal Board

Jul 28, 2014

12080184 (P.T.A.B. Jul. 28, 2014)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
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Ex parte G. RANDY NICHOLSON
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Appeal 2012-0078081
Application 12/080,1842
Technology Center 3600
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Before ANTON W. FETTING, NINA L. MEDLOCK, and
KEVIN W. CHERRY, Administrative Patent Judges.

MEDLOCK, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 18, 20, 21, and 23. We have jurisdiction under 35 U.S.C.
§ 6(b).
We AFFIRM.3

1 The record includes a transcript of the oral hearing held July 22, 2014.
2 The real party in interest identified by Appellant is Excentus Corporation
(App. Br. 2).
3 Our decision will refer to Appellant’s Appeal Brief (“App. Br.,” filed
December 12, 2011) and Reply Brief (“Reply Br.,” filed April 16, 2012),
the Examiner’s Answer (“Ans.,” mailed February 16, 2012), and the Final
Office Action (“Final Rej.,” mailed July 18, 2011).
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Application 12/080,184

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THE CLAIMED INVENTION
Appellant’s claimed invention relates to “a system and method for
discounting the price-per-unit (PPU) of fuel at a fuel merchant” (Spec. ¶ 1).
Claim 18, reproduced below, is illustrative of the subject matter on
appeal:
18. A computer-implemented method of discounting a
price-per-unit (PPU) of fuel during a fueling transaction by a
customer at a fuel merchant, said customer having a financial
card with a number, said method comprising:
reading, by a point of sale terminal, the customer’s
financial card number electronically to begin the fueling
transaction;
identifying the customer by analyzing the financial card
number;
determining by a dispensing controller and based on the
identity of the card issuer that the identified customer
participates in a frequent flier reward program with a particular
card issuer who has a relationship agreement for providing PPU
discounts for fuel in exchange for redeemed frequent flier miles
from the reward program;
obtaining the customer’s approval for exchanging at least
a portion of the customer’s frequent flier miles for PPU
discounts for fuel;
exchanging, after the approval is obtained, at least a
portion of the customer’s frequent flier miles for a predefined
PPU discount for fuel, said predefined PPU discount being
associated with an airline;
discounting under control of said controller the PPU of
the fuel posted on a fuel dispenser by an amount equal to the
predefined PPU discount;
dispensing fuel to the customer at the discounted PPU.

Appeal 2012-007808
Application 12/080,184

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THE REJECTION
The following rejection is before us for review:
Claims 18, 20, 21, and 23 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Antonucci (US 7,606,730 B2, iss. Oct. 20, 2009), Jacoves
(US 6,741,968 B2, iss. May 25, 2004), and McCall (US 6,321,984 B1,
iss. Nov. 27, 2001).

ANALYSIS
Independent claim 18
We are persuaded by Appellant’s argument that the Examiner erred in
finding that the phrase “with a particular card issuer who has a relationship
agreement for providing PPU discounts for fuel in exchange for redeemed
frequent flier miles from the reward program” is non-functional descriptive
material (App. Br. 5–7). However, we are not persuaded that the
Examiner’s rejection is otherwise flawed or that this error on the part of the
Examiner is basis for reversing the rejection of claim 18 under § 103(a).
Appellant does not contend, for example, that the cited references, in
combination, fail to disclose or suggest “a reward point host with whom the
fuel merchant has a relationship agreement.” Indeed, Jacoves discloses just
such an arrangement in which a retailer provides a reward to a customer,
based on the purchase of certain discount triggering items, which may be
redeemed at a gas station (i.e., a fuel merchant with whom the retailer
(reward point host) has a relationship), for a discount per gallon of gasoline
(see, e.g., Jacoves, Abstract and col. 6, ll. 7–22). Antonucci similarly
describes an incentive program in which a customer may exchange his or her
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merchant loyalty points for a dollar amount off the purchase of gasoline at a
“participating gas station merchant” (see, e.g., Antonucci, col. 20, ll. 10–14).
We also are not persuaded of error on the part of the Examiner by
Appellant’s argument that the Examiner has not shown that the references
teach “exchanging, after the approval is obtained, at least a portion of the
customer’s frequent flier miles for a predefined PPU discount for fuel, said
predefined PPU discount being associated with an airline,” as recited in
claim 18 (App. Br. 7–8). Appellant argues that the cited portions of
Antonucci fail to teach this limitation. Yet claim 18 is rejected as
unpatentable over the combination of Antonucci, Jacoves, and McCall, not
over Antonucci alone. The argument that a single reference alone does not
disclose all the recited claim limitations is not persuasive because
nonobviousness cannot be established by attacking the references
individually when the rejection is based on the teachings of a combination of
references. See In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986).
The Examiner cites column 1, lines 62–66 of Antonucci as disclosing
that one well-known example of a consumer incentive program is a
“frequent flyer” program, which rewards airline passengers with “mileage
points” that may be redeemed for other products and services, e.g., free
airfare and car rentals (Ans. 6 and 12–13). And the Examiner further relies
on Antonucci as disclosing that customer reward points may be converted to
a monetary equivalent, i.e., an “X” dollar, discount for fuel (Ans. 6 and 12,
citing Antonucci, col. 20, ll. 10–14). The Examiner acknowledges that
Antonucci does not teach a piece-per-unit (“PPU”) fuel discount, and cites
Jacoves as disclosing an incentive program in which reward points may be
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redeemed for a predefined PPU discount for gasoline (Ans. 6 and 12, citing
Jacoves, col. 6, ll. 7–22).
In our view, modifying a frequent flyer program, as disclosed in
Antonucci, to allow a customer to exchange his or her frequent flyer miles
for a PPU fuel discount, as disclosed in Jacoves, is nothing more than a
combination of prior art elements according to their established functions,
and yields a predictable result. Therefore, it would have been obvious at the
time of Appellant’s invention to a person of ordinary skill in the art.
See KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 416 (2007) (“The
combination of familiar elements according to known methods is likely to be
obvious when it does no more than yield predictable results”).
In the proposed combination, the PPU fuel discount is associated with
frequent flyer miles, i.e., frequent flyer miles are exchanged for the PPU
discount. Therefore, the PPU discount is “associated with an airline,”
i.e., the airline that awarded the frequent flyer miles, which again meets the
language of claim 18, under a broad, but reasonable, interpretation.
Pointing to the Examiner’s statement, reproduced below, Appellant
argues that the “Examiner has not made explicit a proper reason for
combining Antonucci and Jacoves:”
the combination of Jacoves and Antonucci would have been
obvious because it requires choosing from a finite number of
identified, predictable solutions, with a reasonable expectation
of success. These solutions include expressing the discount as
an absolute money amount, as a percentage or as a PPU.

(App. Br. 9, quoting Final Rej. 4). However, it clearly appears from a
fair reading of the Examiner’s statement that the Examiner’s only
point is that it would have been obvious, given the finite number of
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ways of expressing a fuel discount, to modify the incentive program in
Antonucci where the discount is expressed as a dollar amount off the
purchase of gasoline, i.e., an absolute money amount, to instead
express the discount as a PPU, as taught by Jacoves, i.e., to express a
discount for fuel in the same terms, e.g., as dollars and cents per
gallon, used to price fuel (see Ans. 13).
Finally, we are not persuaded by Appellant’s argument that the
Examiner failed to consider claim 18 as a whole (App. 10–12). Again, the
focus of Appellant’s argument is on Antonucci; however, claim 18 is
rejected over the combination of Antonucci, Jacoves, and McCall. As
mentioned above, nonobviousness cannot be established by attacking the
references individually when the rejection is based on the teachings of a
combination of references. See In re Merck, 800 F.2d at 1097.
The Examiner properly considered claim 18 as a whole, and properly
concluded that the combination of Antonucci, Jacoves, and McCall fully
meets the claim language (Ans. 5–7). Therefore, we sustain the Examiner’s
rejection of claim 18 under 35 U.S.C. § 103(a).
Dependent claim 20
Claim 20 depends from claim 18 and recites that the method of
claim 18 further comprises, inter alia, “converting the redeemed reward
points to a cash value at a rate agreed upon by the vendor and the fuel
merchant.”
Appellant argues that claim 20 is allowable at least because of its
dependence on claim 18, and that the Examiner, moreover, erred in finding
that the phrase “at a rate agreed upon by the vendor and the fuel merchant”
is non-functional descriptive material (App. Br. 16). We disagree.
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The rationale underlying the “printed matter” cases has been extended
to the analysis of the patentability of method claims. King Pharmaceuticals
Inc. v. Eon Labs, Inc., 616 F.3d 1267, 1278–79 (Fed. Cir. 2010) (applying
the “printed matter” reasoning to method claims containing an “informing”
step that could be either printed or verbal instructions). In this case, the
relevant question is whether the recitation that the conversion rate is one that
was agreed on by the vendor and the fuel merchant, rather than being
determined in some other way, e.g., set by the vendor alone, has a “new and
unobvious functional relationship” with the method. Id. at 1279.
There is no objective evidence of record that there is a functional
distinction in converting redeemed reward points to a cash value at a rate
agreed upon by the vendor and the fuel merchant as compared to converting
redeemed reward points to a cash value at a rate determined in some other
way. Regardless of the particular manner in which the rate is established,
the underlying method, i.e., converting the redeemed reward points to a cash
value at a set rate and crediting cash value equal to the redeemed discount to
an account associated with the fuel merchant, is the same. The manner in
which the rate is determined does not depend on the method, and the method
does not depend on the manner in which the rate is determined. As such, it
constitutes non-functional descriptive material that may not be relied on for
patentability. See In re Ngai, 367 F.3d 1336, 1339 (Fed. Cir. 2004); cf. In re
Gulack, 703 F.2d 1381, 1385 (Fed. Cir. 1983) (when descriptive material is
not functionally related to the substrate, the descriptive material will not
distinguish the invention from the prior art in terms of patentability).
Antonucci discloses converting loyalty points into a cash value at a
predetermined rate (see Antonucci, col. 20, ll. 9–16, describing that the
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conversion of loyalty points to gas merchant dollars having a monetary
equivalent, and col. 19, ll. 45–59, describing a conversion rules database
containing existing conversion rates for a particular merchant or
transaction). As such, Antonucci meets the claim language.
In view of the foregoing, we sustain the Examiner’s rejection of
claim 20 under 35 U.S.C. § 103(a).
Independent claim 21 and dependent claim 23
Appellant’s arguments with respect to claim 21 are substantially
identical to Appellant’s arguments with respect to claim 18. We found
Appellant’s arguments unpersuasive with respect to claim 18 and we find
them equally unpersuasive with respect to claim 21.
Therefore, we sustain the Examiner’s rejection of claim 21 under
35 U.S.C. § 103(a). We also sustain the Examiner’s rejection of claim 23,
which was not argued separately except based on its dependence from
claim 21 (App. Br. 17).

DECISION
The Examiner’s rejection of claims 18, 20, 21, and 23 under 35 U.S.C.
§ 103(a) is affirmed.
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

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