Ex Parte Reid et al

Patent Trial and Appeal Board

May 30, 2013

11131602 (P.T.A.B. May. 30, 2013)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
___________ 2
3
BEFORE THE PATENT TRIAL AND APPEAL BOARD 4
___________ 5
6
Ex parte WILLIAM REID, 7
CRAIG SWACKHAMMER, 8
KERRY LYNCH, 9
and JOHNSON LAU 10
___________ 11
12
Appeal 2011-001991 13
Application 11/131,602 14
Technology Center 3600 15
___________ 16
17
18
Before MURRIEL E. CRAWFORD, ANTON W. FETTING, and 19
JAMES A. TARTAL, Administrative Patent Judges. 20
FETTING, Administrative Patent Judge. 21
DECISION ON APPEAL 22
Appeal 2011-001991
Application 11/131,602

2

STATEMENT OF THE CASE1 1
William Reid, Craig Swackhammer, Kerry Lynch, and Johnson Lau 2
(Appellants) seek review under 35 U.S.C. § 134 of a final rejection of claims 3
1, 4, 5, 7-10, 13-16, and 25-36, the only claims pending in the application on 4
appeal. We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b). 5
The Appellants invented a form of assurance and financing services, 6
providing assurance and financing services to buyers and sellers involved in 7
commercial transactions. (Specification, para. [0002]). 8
An understanding of the invention can be derived from a reading of 9
exemplary claim 1, which is reproduced below [bracketed matter and some 10
paragraphing added]. 11
1. A computer readable medium stored on a server 12
computer, which executes: 13
[1] control logic on the computer readable medium 14
for monitoring a plurality of transactions between a buyer 15
and a seller, 16
wherein for each transaction, a payment is owed by the 17
buyer to the seller; 18
[2] control logic on the computer readable medium 19
for providing a payment instruction to the buyer for one 20
or more transactions in the plurality of transactions; 21
[3] control logic on the computer readable medium 22
for receiving a request from the buyer 23
for buyer assurance by a buyer bank 24

1 Our decision will make reference to the Appellants’ Appeal Brief (“App.
Br.,” filed July 7, 2010) and Reply Brief (“Reply Br.,” filed October 25,
2010), and the Examiner’s Answer (“Ans.,” mailed September 1, 2010).
Appeal 2011-001991
Application 11/131,602

3

for the one or more transactions in the plurality of 1
transactions; 2
[4] control logic on the computer readable medium 3
for locking down the one or more transactions 4
for which assurance has been requested by the buyer; 5
and 6
[5] control logic on the computer readable medium 7
for allowing a buyer bank 8
to offer buyer bank payable discounting (BBPD) to the 9
seller 10
using information collected from monitoring the plurality 11
of transactions; 12
[6] wherein the buyer bank handles processing of payables for 13
the plurality of transactions on behalf of the buyer; 14
[7] wherein the control logic configured to allow the buyer bank 15
to offer buyer bank payable discounting (BBPD) to the seller 16
further comprises: 17
[8] control logic on the computer readable medium 18
for displaying to the seller transactions that qualify 19
for BBPD from the buyer bank and allow the seller 20
to request BBPD for one or more transactions 21
selected from the qualified transactions; 22
[9] control logic on the computer readable medium for 23
allowing the buyer bank to approve the selected one or 24
more transactions for BBPD; 25
and 26
[10] control logic on the computer readable medium for 27
allowing the buyer bank to identify the transactions that 28
qualify for BBPD before they are displayed to the seller. 29
The Examiner relies upon the following prior art: 30
Yuan US 2002/0038277 A1 Mar. 28, 2002
Appeal 2011-001991
Application 11/131,602

4

Claims 1, 4, 5, 7-10, 13-16, and 25-36 stand rejected under 35 U.S.C. § 1
102(b) as anticipated by Yuan. 2
ISSUES 3
The issues of anticipation turn primarily on whether Yuan describes 4
control logic on the computer readable medium for locking down the one or 5
more transactions for which assurance has been requested by the buyer and 6
an invoice pre-processor configured to receive a plurality of invoices in an 7
electronic format and generate standard invoice files for the plurality of 8
invoices. 9
FACTS PERTINENT TO THE ISSUES 10
The following enumerated Findings of Fact (FF) are believed to be 11
supported by a preponderance of the evidence. 12
Facts Related to Claim Construction 13
01. Upon the buyer 12 indicating that a transaction is to be buyer-14
assured, the transaction processing system 10 “locks down” that 15
particular transaction and its corresponding payment instruction, 16
i.e., information relating to the transaction and the corresponding 17
payment instruction is protected against any subsequent 18
modifications. Specification, para. [0071]. 19
Facts Related to the Prior Art - Yuan 20
02. Yuan is directed to involving banks, factors or other financial 21
institutions to aid in sales transactions of goods and services 22
between sellers and buyers. By involving banks, factors or other 23
financial institutions, letters of credit may be eliminated. Yuan, 24
para. [0002]. 25
Appeal 2011-001991
Application 11/131,602

5

03. Yuan does not mention any structure configured to provide the 1
buyer with the ability to assign some status to transactions after 2
the buyer receives payment instruction. 3
04. The financing method of Yuan involves a tri-party agreement and 4
assignment between the coordinator of a sales marketplace, a 5
financial institution such as a factor that guarantees the buyer’s 6
credit and that is obligated to collect the buyer’s payment, and 7
another financial institution such as a bank that is associated with 8
the seller. Yuan, para. [0033]. 9
05. Based on the factor’s guarantee of the buyer’s credit and an 10
obligation to pay the bank upon collection of the buyer’s payment, 11
the bank may provide an advance to the seller against the sales 12
price thereby providing the seller with cash flow. Upon the 13
buyer’s payment to the factor, the factor pays the bank that may in 14
turn pay the seller the remaining amount of the sale. Based on the 15
tri-party (assignment) agreement, the factor also pays an agreed-16
upon payment to the coordinator, and the coordinator may 17
negotiate a mark-up or fee with the buyer for arranging the 18
transaction. Yuan, para. [0034]. 19
06. Yuan provides an auction that involves a financial institution, such 20
as a factoring entity, to provide some form of guaranteed payment 21
to sellers who deliver appropriate goods or services. The current 22
invention also addresses the need to avoid fraud by providing the 23
buyer with an amount of time to inspect the goods or services 24
before actually having to pay for them. The current invention also 25
Appeal 2011-001991
Application 11/131,602

6

serves to avoid fraud by combining these concepts, and by 1
providing for the foregoing to occur online. Yuan, para. [0036]. 2
ANALYSIS 3
As to independent claims 1 and 10, we are persuaded by the Appellants’ 4
argument that Yuan fails to describe control logic on the computer readable 5
medium for locking down the one or more transactions for which assurance 6
has been requested by the buyer. The Examiner finds that 7
Yuan teaches: parties are bound by auction rules 0071 [¶ ¶ 8
0034, 0056], while Buyer’s credit can be preapproved so that 9
the terms of the agreement become binding, or to use the terms 10
of the claims, are “locked down” when buyer requests and 11
receives buyer assurance (payment guarantee) from buyer bank 12
[¶ ¶ 0106, 0196]. Moreover, it is implicit that an agreement 13
cannot be modified after the bank clicks on an “I accept” or 14
other similar button, thus rendering the agreement binding on 15
all parties. (see Yuan Moreover, it is implicit that an agreement 16
cannot be modified after the bank clicks on an “I accept” or 17
other similar button, thus rendering the agreement bind on all 18
parties. 19
Ans. 5-6. All of these implementations are by convention that an agreement 20
will be honored rather than software protective enforcement. The Examiner 21
fails to consider the explicit implementation recited in claim 1, as being 22
control logic to lock down. Locking down is lexicographically defined as 23
protecting against any subsequent modifications. FF 01. Thus the locking 24
down in claim 1 cannot be by mere convention as the Examiner finds. 25
Claim 27 recites an invoice pre-processor configured to receive a 26
plurality of invoices in an electronic format and generate standard invoice 27
files for the plurality of invoices. We are not persuaded by the Appellants’ 28
argument that Yuan fails to describe this. The Examiner does not respond, 29
but instead finds the Appellants did not make an argument, but only a 30
Appeal 2011-001991
Application 11/131,602

7

conclusory assertion. Ans. 39-40. The Examiner fails to credit the 1
Appellants’ analysis of each of Yuan’s paragraphs cited by the Examiner. 2
What is particularly vexing about Yuan from an anticipation perspective is 3
that Yuan describes process steps independent of a computer. While Yuan 4
clearly shows receiving invoices, nowhere does it show those being in 5
electronic format and generating invoice files. Yuan describes the process 6
from a manual perspective. While Yuan also suggests using databases to 7
assist in this (Yuan, para. [0159]), Yuan never indicates what information 8
would be in such databases, so Yuan never describes electronic forms of 9
invoices. 10
The failure of Yuan to describe these limitations is fatal to the 11
Examiner’s findings, and so the Examiner has failed to present a prima facie 12
case of anticipation. We express no opinion regarding whether the claims 13
would be obvious over Yuan. 14
CONCLUSIONS OF LAW 15
The rejection of claims 1, 4, 5, 7-10, 13-16, and 25-36 under 35 U.S.C. 16
§ 102(b) as anticipated by Yuan is improper. 17
DECISION 18
The rejection of claims 1, 4, 5, 7-10, 13-16, and 25-36 is reversed. 19
20
REVERSED 21
22
23
24
mls 25