Ex Parte Schaeck et al

Board of Patent Appeals and Interferences

Nov 29, 2010

09731509 (B.P.A.I. Nov. 29, 2010)

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.
09/731,509 12/07/2000 Thomas Schaeck DE919990082 1249
46369 7590 11/30/2010
HESLIN ROTHENBERG FARLEY & MESITI P.C.
5 COLUMBIA CIRCLE
ALBANY, NY 12203
EXAMINER
COLIN, CARL G
ART UNIT PAPER NUMBER
2493
MAIL DATE DELIVERY MODE
11/30/2010 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 THOMAS SCHAECK and MICHAEL WASMUND
____________
Appeal 2009-007326
Application 09/731,5091
Technology Center 2400
____________

Before JAMES D. THOMAS, HOWARD B. BLANKENSHIP, and
JEAN R. HOMERE, Administrative Patent Judges.

HOMERE, Administrative Patent Judge.

DECISION ON APPEAL2

1 Filed on December 7, 2000. This application claims foreign priority to
application 99124724.8, filed December 11, 1999. The real party in interest
is International Business Machines Corp. (App. Br. 2.)
2 The two-month time period for filing an appeal or commencing a civil
action, as recited in 37 C.F.R. § 1.304, or for filing a request for rehearing,
as recited in 37 C.F.R. § 41.52, begins to run from the “MAIL DATE”
(paper delivery mode) or the “NOTIFICATION DATE” (electronic delivery
mode) shown on the PTOL-90A cover letter attached to this decision.
Appeal 2009-007326
Application 09/731,509

2
I. STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) (2002) from the
Examiner’s final rejection of claims 16 through 20 and 22 through 33. (App.
Br. 7; see also Claims App’x.) Claims 1 through 15, 21, and 34 through 47
have been cancelled. (Id.) We have jurisdiction under 35 U.S.C. § 6(b)
(2008).
We reverse.
Appellants’ Invention
Appellants invented a method for providing card holder verification
for a chip card or smart card without the card holder providing a personal
identification number (“PIN”). (Spec. 1, ll. 12-18; id. at 3, ll. 4-14.)
Illustrative Claim
Independent claim 16 further illustrates the invention as follows:
16. A method of controlling card holder verification, said method
comprising:

checking the presence of a trusted association between at least
one device and a card usable with the at least one device, wherein the
checking comprises comparing by one of the card and the at least one
device a first identifier stored on the card with one or more identifiers
stored in the at least one device; and

if the checking indicates the presence of the trusted association,
then performing card holder verification separate from the comparing
using the card and without a holder of the card providing information
by providing another identifier to the card from the at least one device
for comparing by the card to a second identifier stored on the card that
is different from the first identifier, otherwise, if the checking
indicates no trusted association, then involving the holder of the card
in performing card holder verification by the card.

Appeal 2009-007326
Application 09/731,509

3
Prior Art Relied Upon
The Examiner relies on the following prior art as evidence of
unpatentability:
Rikuna 4,752,678 Jun. 21, 1988
Nakamura 5,917,168 Jun. 29, 1999
Risafi 6,473,500 B1 Oct. 29, 2002
(filed Oct. 28, 1998)

Rejections on Appeal
The Examiner rejects the claims on appeal as follows:
Claims 16 through 20, 22, 25, and 28 through 33 stand rejected under
35 U.S.C. § 103(a) as being unpatentable over the combination of Rikuna
and Nakamura.
Claims 23, 24, 26, and 27 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over the combination of Rikuna, Nakamura, and Risafi.
Appellants’ Contentions
Appellants contend that Rikuna fails to disclose storing one or more
identifiers in the terminal. (App. Br. 10-11.) In particular, Appellants argue
that Rikuna’s disclosure of storing both the Primary Account Number
(“PAN”) and the encrypted PAN (“EN-PAN”) in the first card does not
teach “one or more identifiers stored in the at least one device,” as recited in
independent claim 16. (Id. at 11.) According to Appellants Rikuna
discloses storing the EN-PAN in the card and, therefore, the decrypted PAN
comes from the card instead of the terminal. (Id. at 11-12.) Appellants also
contend that independent claim 16 is directed to one card, whereas Rikuna
discloses two separate cards. (Reply Br. 3.)
Further, Appellants argue that Rikuna’s disclosure of entering a PIN
in a second card, or remote PIN entry card, always amounts to providing a
Appeal 2009-007326
Application 09/731,509

4
PIN entered by the card holder and, therefore, does not teach performing
card holder verification without the holder of the card providing
information. (App. Br. 12.) According to Appellants, Rikuna discloses that
user verification is done by the card holder either entering a PIN into the
remote PIN entry card, or if the other card is directly connected to the
terminal, the card holder entering the PIN directly into the terminal. (Reply
Br. 2.) Therefore, Appellants contend that the card holder is always
providing a PIN. (Id.) Moreover, Appellants disagree with the Examiner’s
position that the card holder does not provide information for card holder
verification because Rikuna discloses entering the PIN in the remote PIN
entry card before it is taken by the waitress. (Id.) Appellants allege that
there is no express or implied time frame for card holder verification recited
in independent claim 16. (Id. at 2-3.)
Additionally, Appellants contend that Nakamura discloses that if the
terminal and card do not authenticate, the card holder cannot utilize the card.
(App. Br. 12.) Consequently, Appellants argue that Nakamura does not
teach involving the holder of the card in performing card holder verification
if the checking indicates no trusted association. (Id.) Moreover, Appellants
allege that Rikuna’s disclosure of eliminating the need for a card holder to
enter a PIN into a terminal, but not eliminate the PIN altogether, is at odds
with Nakamura’s disclosure of not always requiring PIN entry. (Reply Br.
4.) Appellants also contend that Nakamura’s disclosure of not requiring a
PIN for a transaction amount lower than a set value is not the same as
requiring a trusted association. (Id.) That is, Appellants argue that
Nakamura’s disclosure amounts to a decision not to check for a trusted
Appeal 2009-007326
Application 09/731,509

5
association below the set value, but instead assuming the risk of fraud at that
level. (Id.)
Examiner’s Findings and Conclusions
The Examiner finds that Rikuna discloses a decryptor within the
terminal that decrypts the EN-PAN to generate a decrypted PAN, which is
stored in the latch of the terminal, and, subsequently, compares the
decrypted PAN with the PAN stored in the PAN memory of a user’s card.
(Ans. 17-18.) Therefore, the Examiner finds that Rikuna’s disclosure
teaches both “a first identifier stored on the card” and “one or more
identifiers stored in the at least one device,” as recited in independent claim
16. (Id. at 18.)
Further, the Examiner finds that time of verification and the
verification process of independent claim 16 can be construed as the same.
(Ans. 19.) The Examiner finds that the objective of Rikuna is to not allow a
user to directly input a PIN during card holder verification. (Id.)
Consequently, the Examiner finds that Rikuna discloses allowing a user to
record a PIN to be stored in a remote PIN entry card a long time before the
verification process takes place. (Id.) The Examiner also finds that Rikuna
discloses that the verification process occurs after a waitress picks up both
cards and inserts both cards into a terminal. (Id. at 20.) Therefore, the
Examiner finds that Rikuna discloses performing the comparison step at the
terminal utilizing both cards without the card holder inputting information
into the terminal. (Id. at 20-21.)
Additionally, the Examiner finds that Nakamura’s disclosure of
requiring PIN entry only when the amount of a transaction exceeds a
preselected floor limit teaches “if the checking indicates no trusted
Appeal 2009-007326
Application 09/731,509

6
association, then involving the holder of the card in performing card holder
verification by the card,” as recited in independent claim 16. (Id. at 21.)

II. ISSUE
Have Appellants shown that the Examiner erred in concluding that the
combination of Rikuna and Nakamura renders independent claim 16
unpatentable? In particular, the issue turns on whether the proffered
combination teaches the following claim limitations:
(a) “performing card holder verification…without a holder of the
card providing information…,” as recited in independent claim 16; and
(b) “if the checking indicates no trusted association, then involving
the holder of the card in performing card holder verification by the card,” as
recited in independent claim 16.

III. FINDINGS OF FACT
The following Findings of Fact (“FF”) are shown by a preponderance
of the evidence.
Rikuna
1. Rikuna generally relates to an integrated circuit (“IC”) card
system that utilizes an IC card and a card terminal to pay charges, such that
the location to pay charges is remote from the position where a card holder
exists. (Col. 1, ll. 8-13.)
2. Rikuna’s figure 8 depicts that during or after completion of
eating at a restaurant, a card holder utilizes a bill to calculate an amount of
payment and inputs both a calculated total amount of payment (“AMT”) and
personal identification number (PIN) into a remote PIN entry card (21).
Appeal 2009-007326
Application 09/731,509

7
(Col. 6, ll. 2-11.) Thereafter, Rikuna discloses that the card holder inserts
his/her user’s card (11) and remote PIN entry card (21), which stores both
the PIN and AMT data, into the first and second card keepers (83A & 83B)
of a card binder (81). (Id. at ll. 11-15.) Rikuna discloses that a waitress in
the restaurant retrieves the card binder (81), brings the card binder to a cash
register, and inserts the remote PIN entry card (21) into the card inlet (15) of
card terminal (12). (Id. at ll. 16-19.) Rikuna discloses transferring the PIN
data which was inputted by the card holder into the remote PIN entry card
(21) to card terminal (12), thereby eliminating the need for the card holder to
visit the cash register and key input the PIN. (Col. 8, ll. 58-66.)
Nakamura
3. Nakamura generally relates to performing on-line revaluation of
token information stored in IC cards and, in particular, to performing such
revaluation in a private location. (Col. 1, ll. 9-14.)
4. Nakamura discloses eliminating PIN validation in order to
speed up the processing of a transaction. (Col. 5, ll. 64-66.) In particular,
Nakamura discloses only requiring PIN entry when the amount of a
transaction exceeds a preselected floor limit. (Col. 6, ll. 8-10.)

IV. ANALYSIS
Claim 16
Independent claim 16 recites, in relevant parts:
1) performing card holder verification…without a holder of the card
providing information…; and 2) if the checking indicates no trusted
association, then involving the holder of the card in performing card
holder verification by the card.

Appeal 2009-007326
Application 09/731,509

8
As detailed in the Findings of Fact section above, Rikuna discloses
utilizing an IC card and a terminal to pay charges, such that the terminal is
remote from the position of the card holder. (FF 1.) In particular, Rikuna
discloses that upon finishing eating at a restaurant, a card holder inputs both
the AMT and PIN into a remote PIN entry card. (FF 2.) After a waitress
retrieves both the card holder’s IC card and the remote PIN entry card, the
waitress inserts the remote PIN entry card into a register or terminal to
thereby transmit the PIN and AMT data to the terminal. (Id.) Accordingly,
Rikuna discloses that the card holder does not need to visit the terminal and
key input the PIN. (Id.)
At best, we find that Rikuna’s disclosure teaches verifying a card
holder’s IC card by taking both the IC card and a remote PIN entry card to a
terminal, such that the card holder does not need to visit the terminal and key
input a PIN. Although Rikuna discloses that the card holder does not need
to visit the terminal and key input a PIN, the card holder verification process
still requires that the card holder always enters his/her PIN into the remote
PIN entry card. Thus, we find that Rikuna fails to teach or suggest
“performing card holder verification…without a holder of the card providing
information…,” as recited in independent claim 16.
Moreover, Nakamura discloses performing revaluation of token
information stored in an IC card at a private location. (FF 3.) In particular,
Nakamura discloses speeding up the processing of a transaction by
eliminating PIN validation. (FF 4.) Further, Nakamura discloses only
requiring PIN entry when the amount of a transaction exceeds a preselected
floor limit. (Id.)
Appeal 2009-007326
Application 09/731,509

9
We find that Nakamura’s disclosure teaches, at best, requiring a card
holder of an IC card to enter a PIN into a terminal only when the amount of
a transaction exceeds a threshold value. However, we note that a threshold
value is not a trusted associated. We agree with Appellants that Nakamura’s
disclosure of not requiring a PIN for a transaction amount lower that a
threshold value amounts to not checking for a trusted association, but instead
assuming the risk of fraud at that level. (Reply Br. 4.) Further, we find that
Rikuna fails to cure the noted deficiencies in Nakamura. Thus, we find that
the proffered combination also fails to teach or suggest “if the checking
indicates no trusted association, then involving the holder of the card in
performing card holder verification by the card,” as recited in independent
claim 16.
Since Appellants have shown at least one error in the Examiner's
rejection of independent claim 16, we need not address Appellants' other
arguments. It follows that Appellants have shown that the Examiner erred in
concluding that the combination of Rikuna and Nakamura renders
independent claim 16 unpatentable.
Claims 17 through 20 and 22 through 33
Since independent claim 33, and dependent claims 18 through 20 and
22 through 32, also incorporate the limitations discussed above, we find that
Appellants have also shown error in the Examiner’s rejection of these claims
for the reasons set forth in our discussion of independent claim 16.

Appeal 2009-007326
Application 09/731,509

10
V. CONCLUSION OF LAW
Appellants have shown that the Examiner erred in rejecting claims
16 through 20 and 22 through 33 as being unpatentable under 35 U.S.C.
§ 103(a).

VI. DECISION
We reverse the Examiner’s decision to reject claims 16 through 20
and 22 through 33.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).

REVERSED

Vsh

HESLIN ROTHENBERG FARLEY & MESITI P.C.
5 COLUMBIA CIRCLE
ALBANY, NY 12203