Ex Parte Vaidyanathan et al

Board of Patent Appeals and Interferences

Jun 19, 2009

10032751 (B.P.A.I. Jun. 19, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
___________ 2
3
BEFORE THE BOARD OF PATENT APPEALS 4
AND INTERFERENCES 5
___________ 6
7
Ex parte VIJAY VAIDYANATHAN and CHRISTOPHER ALLIN KITZE 8
___________ 9
10
Appeal 2009-000669 11
Application 10/032,751 12
Technology Center 3600 13
___________ 14
15
Decided:1 June 19, 2009 16
___________ 17
18
Before HUBERT C. LORIN, ANTON W. FETTING, and 19
JOSEPH A. FISCHETTI, Administrative Patent Judges. 20
21

1 The two month time period for filing an appeal or commencing a civil action, as
recited in 37 CFR § 1.304, begins to run from the decided date shown on this page
of the decision. The time period does not run from the Mail Date (paper delivery)
or Notification Date (electronic delivery).

FETTING, Administrative Patent Judge. 22
DECISION ON APPEAL 23
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2
STATEMENT OF THE CASE 1
Vijay Vaidyanathan and Christopher Allin Kitze (Appellants) seek review 2
under 35 U.S.C. § 134 of a final rejection of claims 1-40, 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) (2002). 5
6
We REVERSE. 7
The Appellants invented a financial model for the buying and selling of digital 8
files in a digital marketplace (Spec. 1:8-10). 9
An understanding of the invention can be derived from a reading of exemplary 10
claims 1, 2, 8, 9, and 28, which is reproduced below [bracketed matter and some 11
paragraphing added]. 12
1. A method for providing an online digital marketplace, the digital 13
marketplace having a plurality of digital files for access by consumers 14
over a network, the method comprising the steps of: 15
(a) allowing a content owner to post a file on the marketplace 16
for access by users by, 17
(i) providing information about the file, 18
(ii) setting a retail price that users will be charged for 19
downloading the file, and 20
(iii) setting a reseller commission for the file; 21
(b) allowing a first user to search for files posted on the digital 22
marketplace for one to resell on a third party website; 23
(c) allowing a second user to search the files posted on the 24
digital marketplace for one to download; 25
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(d) if the second user selects a particular file to download, 1
charging the user the retail price set for the file; 2
(e) if the second user downloads the particular file from the 3
third party website, paying the first user the reseller 4
commission set for the file; and 5
(f) paying the content owner a payment based on the retail price 6
minus the reseller commission. 7
8
2. The method of claim 1 further including the step of: 9
(g) allowing the content owner to monitor download statistics 10
for the file the content owner posted and to change the retail 11
price and the reseller commission for the file in real-time. 12
13
4. The method of claim 1 wherein step (a) further includes the step of: 14
(iv) allowing the content owner to set the retail price and 15
the reseller commission both positively and negatively. 16
17
8. The method of claim 1 wherein step (b) further includes the step of: 18
(i) requesting the first user to enter sorting options for the 19
search. 20
21
9. The method of claim 8 wherein step (b) 22
(i) further includes the step of: including as the sorting 23
options sorting the matching files by popularity, by date, 24
by size, by price, and by the reseller commission. 25
26
28. The method of claim 23 wherein step (b) further includes the step 27
of: 28
(i) requesting the first user to enter sorting options for the 29
search. 30
31
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This appeal arises from the Examiner’s Final Rejection, mailed September 25, 1
2007. The Appellants filed an Appeal Brief in support of the appeal on February 2
13, 2008. An Examiner’s Answer to the Appeal Brief was mailed on March 13, 3
2008. A Reply Brief was filed on May 13, 2008. 4
5
PRIOR ART 6
The Examiner relies upon the following prior art: 7
Ferguson et al. US 5,819,092 October 6, 1998
Vestergaard et al. US 2002/0146122 A1 October 10, 2002
Eglen et al. US 2003/0023505 A1 January 30, 2003
Spagna et al. US 6,587,837 B1 July 1, 2003
Likourezos et al US 2007/0005432 A1 January 4, 2007
8
REJECTIONS 9
Claims 1, 3-7, 10-12, 14-18, and 21-23 stand rejected under 35 U.S.C. § 103(a) 10
as unpatentable over Spagna, Vestergaard, and Likourezos. 11
Claims 2, 13, 23-27, and 30-37 stand rejected under 35 U.S.C. § 103(a) as 12
unpatentable over Spagna, Vestergaard, Likourezos, and Eglen. 13
Claims 8-9 and 19-20 stand rejected under 35 U.S.C. § 103(a) as unpatentable 14
over Spagna, Vestergaard, Likourezos, and Ferguson. 15
Claims 28-29 and 38-40 stand rejected under 35 U.S.C. § 103(a) as 16
unpatentable over Spagna, Vestergaard, Likourezos, Eglen, and Ferguson. 17
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ISSUES 1
The issues pertinent to this appeal are 2
• Whether the Appellants have sustained their burden of showing the 3
Examiner erred in the rejection of claims 1, 3-7, 10-12, 14-18, and 21-23 4
under 35 U.S.C. § 103(a) as unpatentable over Spagna, Vestergaard, and 5
Likourezos. 6
o This pertinent issue turns on whether Spagna describes two sites, 7
digital marketplace and a 3rd party website, that a user can download a 8
file from. 9
• Whether the Appellants have sustained their burden of showing the 10
Examiner erred in the rejection of claims 2, 13, 23-27, and 30-37 under 35 11
U.S.C. § 103(a) as unpatentable over Spagna, Vestergaard, Likourezos, and 12
Eglen. 13
o This pertinent issue turns on whether Spagna describes two sites, 14
digital marketplace and a 3rd party website, that a user can download a 15
file from. 16
• Whether the Appellants have sustained their burden of showing the 17
Examiner erred in the rejection of claims 8-9 and 19-20 under 35 U.S.C. § 18
103(a) as unpatentable over Spagna, Vestergaard, Likourezos, and Ferguson. 19
o This pertinent issue turns on whether Spagna and Ferguson describe 20
the sorting the search results using the criteria of popularity, date, size, 21
price, and reseller commission. 22
• Whether the Appellants have sustained their burden of showing the 23
Examiner erred in the rejection of claims 28-29 and 38-40 under 35 U.S.C. § 24
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103(a) as unpatentable over Spagna, Vestergaard, Likourezos, Eglen, and 1
Ferguson. 2
o This pertinent issue turns on whether Spagna and Ferguson describe 3
the sorting the search results using the criteria of popularity, date, size, 4
price, and reseller commission. 5
6
FACTS PERTINENT TO THE ISSUES 7
The following enumerated Findings of Fact (FF) are believed to be supported 8
by a preponderance of the evidence. 9
Spagna 10
01. Spagna is directed to a system and related tools for the secure delivery 11
and rights management of digital assets over the Internet and the World 12
Wide Web (Spagna 1:53-58). 13
02. Spagna describes that content proprietors, the owners of original 14
content, are authorized to package independent content for distribution. 15
Content includes songs or a series of songs. The proprietors can exploit 16
this right directly or license the content to a electronic digital content 17
store or other market partners in exchange for usage payments related to 18
electronic commerce revenues (Spagna 12:24-33 and 50:16-39). 19
Content providers are further enabled to designate usage conditions for 20
the content or file that is being packaged (Spagna 12:52-56). 21
03. Electronic digital content stores are entities who market electronic 22
content through a variety of services or applications. For example, an 23
electronic digital content store is a web site that provides electronic 24
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downloads of software. Electronic digital content stores further package 1
content with aggregate content information, including secondary usage 2
information and metadata, and package the content with that information 3
into a secure container (SC) (Spagna 13:14-37). 4
04. The secondary usage information includes content purchase price, 5
pay-per-listen price, copy authorizations, and time-availability 6
restrictions (Spagna 13:14-37 and 62:22-52). 7
05. The electronic content providers use the metadata to extract 8
information necessary to enable the electronic content stores to search 9
for content available (Spagna 70:67 – 71:24). 10
06. Electronic content providers identify the products they wish to sell 11
and deliver electronically or enabling the downloading of the content 12
(Spagna 13:38-48). The electronic content providers provide metadata 13
links to the electronic stores that enables the stores to search through the 14
database of content (Spagna 71:1-24). Alternatively, electronic digital 15
stores can request from the electronic digital content providers to 16
provide content to the secure digital content electronic distribution 17
system (Spagna 45:32-39 and 53:40-60). 18
07. The electronic content stores then sell the available digital content to 19
consumers (Spagna 73:47-61). The system further designates secondary 20
content sites to host popular content such that when the primary content 21
sites approach a capacity limit, the secondary sites can provide the 22
popular content to consumers (Spagna 73:35-42). The electronic store is 23
also responsible for providing support for product searches, previews, 24
selections, and purchases to consumers (Spagna 75:33-40). 25
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08. After the completion of the purchase of content, the electronic digital 1
store transfers secure containers that the content is packaged in to the 2
end user device (Spagna 26:25-39). 3
09. Users are enabled to sort content based on artist, category, and other 4
criteria (Spagna 94:2-3). 5
Vestergaard 6
10. Vestergaard is directed to a method and system for the secure 7
distribution of digital media files over computer networks (¶ 0001). 8
11. Vestergaard describes a method in which content owners can securely 9
distribute content and users can download the desired content in multiple 10
ways. This is accomplished by packaging an execution file with a 11
decryption engine, a decryption key, and the content. Upon execution, 12
the decryption engine decrypts the content using the decryption key. 13
Once decrypted, the content is presented to the user in a viewer 14
(Vestergaard ¶’s 0038-0044 and 0048). 15
12. The price model for dynamically pricing the item, the initial price for 16
the item, the implicit or marginal cost of the item, the minimum price for 17
the item, the maximum price, and the current price for the item are all 18
stored fields (Vestergaard ¶ 0064). The current demand or the number 19
of times the item was purchased within a specified period, historical 20
pricing, and quantity ordering amounts are also maintained fields. Using 21
these fields, the system determines the dynamic price for the product 22
(Vestergaard ¶’s 0064-0068). The price can be adjusted based on the 23
demand for the item so as to maximize profit (Vestergaard ¶ 83). 24
Generally, the greater demand for the particular item, the price will be 25
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increased until the profit is maximized (Vestergaard ¶ 83). Similarly, 1
when the demand for the item is lower, the dynamic pricing system 2
lowers the price until profit is maximized (Vestergaard ¶ 83). 3
13. The packaged file containing an MP3 file, decryption engine, 4
decryption key, and an embedded viewer is called an MPE file 5
(Vestergaard ¶ 0058). The MPE file further contains content 6
information including header information, song specification, and a song 7
preview section (Vestergaard ¶’s 0077 – 0085). 8
14. A royalty payment scheme is designed for each MPE file and is 9
encoded with each file (Vestergaard ¶ 0101). 10
15. Users are enabled to search for files using search engines (Vestergaard 11
¶ 0105). 12
16. There are three different pricing models available (Vestergaard ¶ 13
0111-0113). The first model is a Free model (Vestergaard ¶ 0058). 14
Second is a Pay model, in which consumers will pay a fee in order to 15
obtain access to the complete and decrypted MPE file (Vestergaard ¶ 16
0111). Lastly, the Sponsored model is where a sponsor covers the fee 17
for the MPE file in return for the consumer visiting the sponsor website 18
(Vestergaard ¶ 0112). In other words, the MPE file is free for the 19
consumer for visiting the sponsor website (Vestergaard ¶ 0112). 20
17. A retail sales price is specified for each MPE file (Vestergaard ¶ 21
0151). An MPE distributor field specifies which distributor will be paid 22
a commission upon sale of the MPE file (Vestergaard ¶ 0152). 23
Compensation can be in terms of gross revenue, or based on a flat rate 24
(Vestergaard ¶ 0152). In a preferred embodiment, the distributor 25
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percentage field is set to default at 25% of gross receipts (Vestergaard ¶ 1
0152). 2
Likourezos 3
18. Likourezos is directed to a system and method for the real-time 4
payment for an item won on an electronic auction (Likourezos ¶ 0002). 5
19. Likourezos describes that prior art methods for compensating the 6
seller includes a method that pays the seller by direct deposit an amount 7
equal to the charged amount minus a commission and a transaction fee 8
(Likourezos ¶ 0010). The commission is typically paid to the operator or 9
owner of the electronic auction web site and the transaction fee is paid to 10
the operator or owner of the payment web site (Likourezos ¶ 0010). 11
Eglen 12
20. Eglen is directed to a sales system adapted to dynamically price goods 13
and/or services over a computer network (Eglen ¶ 0002). 14
21. An item is placed for sale at a first price and based on the number of 15
orders received at the first price the system dynamically determines a 16
second price (Eglen ¶’s 0007-0009). 17
22. Statistical information such as information on the current demand, the 18
number of times an item was purchased within a specified period, 19
historical pricing, and quantity ordered information is maintained on the 20
system (Eglen ¶ 0064). This information is used to dynamically price an 21
item (Eglen ¶ 0064). 22
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23. In general, the greater the demand for an item, the server will increase 1
the price of the item (and vice versa) in order to maximize profits (Eglen 2
¶ 0083). 3
Ferguson 4
24. Ferguson is directed to a software tool for setting fees for online 5
computer services (Ferguson 1:12-15). 6
25. Ferguson describes a tool that enables users to determine which online 7
services the user desires and determine the fee for those services 8
(Ferguson 7:1-5). The system includes a visual editing system, called 9
the Online Designer, that enables a developer to create online services 10
using graphical screen displays (Ferguson 10:15-20). 11
26. Sub-tools available on the editing system include quick index 12
searching and attribute searching (Ferguson 10:62 – 11:8). Index 13
searching enables a user to specify the search criteria using an 14
appropriately designed hypermedia input form (Ferguson 10:62-65). 15
Attribute searching enables a user to search through documents by 16
specifying various attributes such as the date of the last update, the size 17
of the document, and the size of the fee for downloading the document 18
(Ferguson 10:66 – 11:3). 19
Facts Related To The Level Of Skill In The Art 20
27. Neither the Examiner nor the Appellants has addressed the level of 21
ordinary skill in the pertinent arts of digital content management, sales, 22
and distribution. We will therefore consider the cited prior art as 23
representative of the level of ordinary skill in the art. See Okajima v. 24
Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001) (“[T]he absence of 25
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specific findings on the level of skill in the art does not give rise to 1
reversible error ‘where the prior art itself reflects an appropriate level 2
and a need for testimony is not shown’”) (quoting Litton Indus. Prods., 3
Inc. v. Solid State Sys. Corp., 755 F.2d 158, 163 (Fed. Cir. 1985). 4
Facts Related To Secondary Considerations 5
28. There is no evidence on record of secondary considerations of non-6
obviousness for our consideration. 7
PRINCIPLES OF LAW 8
Obviousness 9
A claimed invention is unpatentable if the differences between it and the 10
prior art are “such that the subject matter as a whole would have been obvious at 11
the time the invention was made to a person having ordinary skill in the art.” 35 12
U.S.C. § 103(a) (2000); KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007); 13
Graham v. John Deere Co., 383 U.S. 1, 13 (1966). 14
In Graham, the Court held that that the obviousness analysis is bottomed on 15
several basic factual inquiries: “[(1)] the scope and content of the prior art are to be 16
determined; [(2)] differences between the prior art and the claims at issue are to be 17
ascertained; and [(3)] the level of ordinary skill in the pertinent art resolved.” 383 18
U.S. at 17 See also KSR, 550 U.S. at 406. “The combination of familiar elements 19
according to known methods is likely to be obvious when it does no more than 20
yield predictable results.” Id. at 416. 21
“When a work is available in one field of endeavor, design incentives and 22
other market forces can prompt variations of it, either in the same field or a 23
different one. If a person of ordinary skill can implement a predictable variation, § 24
103 likely bars its patentability.” Id. at 417. 25
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“For the same reason, if a technique has been used to improve one device, 1
and a person of ordinary skill in the art would recognize that it would improve 2
similar devices in the same way, using the technique is obvious unless its actual 3
application is beyond his or her skill.” Id. 4
“Under the correct analysis, any need or problem known in the field of 5
endeavor at the time of invention and addressed by the patent can provide a reason 6
for combining the elements in the manner claimed.” Id. at 420. 7
ANALYSIS 8
Claims 1, 3-7, 10-12, 14-18, and 21-23 rejected under 35 U.S.C. § 103(a) as 9
unpatentable over Spagna, Vestergaard, and Likourezos 10
The Appellants argue these claims as a group. 11
Accordingly, we select claim 1 as representative of the group. 12
37 C.F.R. § 41.37(c)(1)(vii) (2008). 13
The Examiner found that Spagna describes all of the limitations of claim 1 14
except for limitations (a)(iii), (e), and (f) (Ans. 3-4). Independent claims 1, 12 and 15
23 each recites these limitations. The Examiner found that Vestergaard and 16
Likourezos describe limitations (a)(iii), (e), and (f) (Ans. 4). The Examiner further 17
found that a person with ordinary skill in the art would have recognized the benefit 18
of creating revenue opportunities by enabling users to have greater control over the 19
selling of products as described by Vestergaard and Likourezos and a person with 20
ordinary skill in the art would have found it obvious to combine Spagna, 21
Vestergaard, and Likourezos in order to determine the amount of revenue they are 22
willing to receive for assistance in selling their product while also compensating 23
the distributor for their assistance (Ans. 4-5). 24
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The Appellants contend that Spagna, Vestergaard, and Likourezos fail to 1
describe “if a second user downloads a file from the third party website, paying a 2
first user a reseller commission for the sale of a file owned by a content owner and 3
then paying the content owner a payment based on a retail price minus the reseller 4
commission where the first user downloaded the file from a digital marketplace 5
and resold the file on the third party website” (Br. 13: third ¶ and Reply Br. 3: last 6
¶). 7
Claim 1 requires that a user be able to browse the digital marketplace and 8
download a file from either the digital marketplace or a 3rd party website. In other 9
words, claim 1 requires that there be two locations that a user can download a file 10
from. The Examiner has relied on Spagna to describe this feature. However, 11
Spagna fails to describe two different sites that the second user can download a file 12
from. Spagna describes that a user is enabled to search and download a file from 13
an electronic content store (FF 07), but fails to describe any second location that a 14
user can download the file from. As such, Spagna fails to describe a second user 15
downloading a file from a 3rd party website and fails to describe claim 1. 16
The Appellants have sustained their burden of showing that the Examiner erred 17
in rejecting claims 1, 3-7, 10-12, 14-18, and 21-23 under 35 U.S.C. § 103(a) as 18
unpatentable over Spagna, Vestergaard, and Likourezos. 19
20
Claims 2, 13, 23-27, and 30-37 rejected under 35 U.S.C. § 103(a) as 21
unpatentable over Spagna, Vestergaard, Likourezos, and Eglen 22
The Appellants rely on their arguments in support of claim 1 above, which we 23
found to be sufficient to overcome the Appellants’ burden and so have sustained 24
their burden of showing that the Examiner erred in rejecting claims 2, 13, 23-27, 25
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and 30-37 under 35 U.S.C. § 103(a) as unpatentable over Spagna, Vestergaard, 1
Likourezos, and Eglen. 2
3
Claims 8-9 and 19-20 rejected under 35 U.S.C. § 103(a) as unpatentable over 4
Spagna, Vestergaard, Likourezos, and Ferguson 5
We find that dependant claims 8-9, which depend from claim 1, and dependant 6
claims 19-20, which depend from claim 12, also contain the limitation we found 7
the Examiner erred in rejecting supra. Since this issue is dispositive as to the 8
rejections against these claims, we need not reach the remaining arguments raised 9
by the Appellants against the rejection of claims 8-9 and 19-20. 10
The Appellants have sustained their burden of showing that the Examiner erred 11
in rejecting claims 8-9 and 19-20 under 35 U.S.C. § 103(a) as unpatentable over 12
Spagna, Vestergaard, Likourezos, and Ferguson. 13
14
Claims 28-29 and 38-40 rejected under 35 U.S.C. § 103(a) as unpatentable 15
over Spagna, Vestergaard, Likourezos, Eglen, and Ferguson 16
We find that dependant claims 28-29, which depend from claim 23, and 17
dependant claims 38-40, which depend from claim 33, also contain the limitation 18
we found the Examiner erred in rejecting supra. Since this issue is dispositive as 19
to the rejections against these claims, we need not reach the remaining arguments 20
raised by the Appellants against the rejection of claims 28-29 and 38-40. 21
The Appellants have sustained their burden of showing that the Examiner erred 22
in rejecting claims 28-29 and 38-40 under 35 U.S.C. § 103(a) as unpatentable over 23
Spagna, Vestergaard, Likourezos, Eglen, and Ferguson. 24
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1
CONCLUSIONS OF LAW 2
The Appellants have sustained their burden of showing that the Examiner erred 3
in rejecting claims 1, 3-7, 10-12, 14-18, and 21-23 under 35 U.S.C. § 103(a) as 4
unpatentable over Spagna, Vestergaard, and Likourezos. 5
The Appellants have sustained their burden of showing that the Examiner erred 6
in rejecting claims 2, 13, 23-27, and 30-37 under 35 U.S.C. § 103(a) as 7
unpatentable over Spagna, Vestergaard, Likourezos, and Eglen. 8
The Appellants have sustained their burden of showing that the Examiner erred 9
in rejecting claims 8-9 and 19-20 under 35 U.S.C. § 103(a) as unpatentable over 10
Spagna, Vestergaard, Likourezos, and Ferguson. 11
The Appellants have sustained their burden of showing that the Examiner erred 12
in rejecting claims 28-29 and 38-40 under 35 U.S.C. § 103(a) as unpatentable over 13
Spagna, Vestergaard, Likourezos, Eglen, and Ferguson. 14
15
DECISION 16
To summarize, our decision is as follows: 17
• The rejection of claims 1, 3-7, 10-12, 14-18, and 21-23 under 35 U.S.C. § 18
103(a) as unpatentable over Spagna, Vestergaard, and Likourezos is not 19
sustained. 20
• The rejection of claims 2, 13, 23-27, and 30-37 under 35 U.S.C. § 103(a) as 21
unpatentable over Spagna, Vestergaard, Likourezos, and Eglen is not 22
sustained. 23
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• The rejection of claims 8-9 and 19-20 under 35 U.S.C. § 103(a) as 1
unpatentable over Spagna, Vestergaard, Likourezos, and Ferguson is not 2
sustained. 3
• The rejection of claims 28-29 and 38-40 under 35 U.S.C. § 103(a) as 4
unpatentable over Spagna, Vestergaard, Likourezos, Eglen, and Ferguson is 5
not sustained. 6
7
8
REVERSED 9
10
11
12
mev 13
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