Obviousness Rejection of Claims 1 and 10

On appeal, claim 1 was rejected as obvious in light of two patents: U.S. Patent No. 5,540,513 (the Wyant patent) and U.S. Patent No. 1,495,953 (the Dick patent). Claim 10 was rejected as obvious in light of the Wyant patent, the Dick patent, and U.S. 4,965,948 (the Ruebens patent).

In reviewing the law of obviousness, the Board applied the test for obviousness in light of the Supreme Court's decision in KSR v. Teleflex, 127 S.Ct. 1727, 82 USPQ2d 1385, (2007) that “the combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.” Moreover, the Board noted that, in applying the test for obviousness after KSR, the Supreme Court requires that “a court must ask whether the improvement is more than the predictable use of prior art elements according to their established function.” Lastly, the Board relied upon the Federal Circuit's recent decision in Leapfrog Ent., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1161, 82 USPQ2d 1687, 1690-91 (Fed. Cir. 2007) to require the patent owner to present evidence to rebut evidence that a particular combination would have been common sense.

Analysis of Claim 1:

Claim 1 recites “continuous two-ply seams", which the applicants argued was not suggested in the prior art pocket inserts. The finding of fact showed that the Wyant patent taught forming a pocket insert with “two glued, two-ply seams separated by a folded edge,” and thus did not have continuous seams around the edge of an insert pocket. The Dick patent taught another way to form the seams using a two-ply pocket formed by securing three edges of two sheets with a continuous two-ply team by stitching or otherwise securing the edges. Thus, both the Dick patent and the Wyant patent teach predictable results using different mechanisms for forming a pocket of an insert.

The Board found that the combination of the Wyant and Dick patents would be obvious to a practitioner because: (1) each of the claimed elements is within the prior art, (2) one skilled in the art could have combined the elements known at the time, and (3) it would been recognized to yield predictable results. The Board did not rely on an explicit teaching as to why the seal in the Wyant patent should be combined with the continuous seal in the Dick patent. Instead, the Board relied upon the Supreme Court's decision in KSR in concluding that the "substitution of the continuous, two-ply seam of Dick for the folded seam of Wyant thus is no more than 'the simple substitution of one known element for another or the mere application of a known technique to a piece of prior art ready for improvement.'” The Board took note that the applicants did not provide contrary evidence that it would have been difficult or uniquely challenging to use the continuous seam taught by the Dick patent with the pocket taught by the Wyant patent.

The Board next rejected the applicant’s argument that the Wyant patent teaches away from the Dick patent. The applicant claimed that the use of the Dick patent seams would render the Wyant patent unusable for its primary purpose (selectively foldable tabs). However, the examiner found, and the Board agreed, that using the construction of the Dick patent would allow the possibility of tabs foldable along the perimeter as in the Wyant patent such that the modification would not render the combination unsuitable. While the Wyant patent did not specifically describe this possibility, there was no suggestion or requirement that this method was the only method. Further, the Wyant patent did not actually teach against the use of a pocket constructed on one side surface of a base sheet, on which the examiner relied. Instead, the Board held that merely because the “art is silent on the capabilities or function of any particular item, that is not teaching away from its use.” Thus, the Board held that this minor modification of the method described in the Wyant patent fell within the type of "common sense" modification that one skilled in the art would have made, and is thus consistent with the Supreme Court's decision in KSR. As such, the Board found that there was sufficient evidence to maintain the prima facie obviousness rejection since selection between the two-ply seam of Dick and folded seam of Wyatt was “a choice between viable alternatives.”

Analysis of Claim 10:

The applicants further argued that the combination of the Wyant patent, the Dick patent, and the Ruebens patent did not disclose or suggest that "the base sheet and the pocket sheet are further adhered to one another along a strip parallel to the third and fourth edges of the sheets, so as to separate two pockets formed between the sheets” as recited in claim 10. In finding claim 10 obvious in light of these references, the Board found that the Ruebens patent discloses a photo album having a top sheet adhered to a base sheet along a strip to separate a pocket sheet into two pockets. Using this same adhesive strip to create separate pockets is the identical use as was in the prior art and would yield predictable results. The Board also highlighted that it was not a unique challenge or difficulty, and that the use of a line of adhesive to separate a pocket into two in a photo album would be recognized to improve similar devices. Thus, based upon the Supreme Court's ruling in KSR, since claim 10 recites elements well known in the art and for which the combination was within the skill of one of ordinary skill in the art yielding predictable results, claim 10 was obvious.

Anticipation Rejection of Claim 35

Claim 35 was rejected under 35 U.S.C. §102(b) as anticipated by U.S. Patent No. 5,141,252 (the Michlin patent). Claim 35 recited, among other features, “an adhesive between the base sheet and the pocket sheet to bond the base sheet to the pocket sheet to form a pocket with an opening facing the binding edge, the pocket insert having a thickness rendering the insert passable through a copier or printer in sequence with a sheet of paper having the given width and length, the thickness of the pocket insert being at its maximum equal to a combined thickness of the base sheet single thickness, the pocket sheet single sheet thickness and the adhesive.”

In order to further understand the recited "thickness rendering the insert passable through a copier or printer in sequence," the Board reviewed the Specification. The Specification discloses a method of creating a pocket insert capable of being collated along with other materials in a copier, but “provides no detailed description of what thickness is required to render the insert passable through a copier or printer in sequence with a sheet of paper other than to say that ‘the pocket insert should be assembled of standard weight paper.’” (Finding of fact 6).

In affirming the examiner's rejection, the Board found that, for purposes of inherency, a result must necessarily follow from the disclosed prior art. In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349, 64 USPQ2d 1202, 1206 (Fed. Cir. 2002). The fact that a result may occur is not sufficient for purposes of inherency since "'[t]he mere fact that a certain thing may result from a given set of circumstances is not sufficient.' In re Robertson, 169 F.3d 743, 745, 49 USPQ2d 1949, 1951 (Fed. Cir. 1999)." In reviewing the record in light of this test, the Board noted that the defined thickness in the claim is simply a thickness using standard materials and is not a specific thickness. Similarly, the Michlin patent discloses a preprinted insert which necessarily was printed using a printer. As such, the fact that the Michlin patent discloses a preprinted insert which otherwise meets the remaining features established a prima facie case of anticipation based upon inherency. Since there was no evidence to rebut this prima facie case of anticipation in order to show that the disclosed preprinted insert did not inherently disclose such a feature, claim 35 was properly rejected under 35 U.S.C. §102(b) as being inherently anticipated by the Michlin patent.

Board Finds Obviousness Where Modification Was Simply A Substitution of One Known Element For Another Known Element And Specification Describes Point of Novelty In General Terms.

In Ex Parte Catan, Appeal 2007-0820 (BPAI, July 3, 2007) (precedential), the Board affirmed rejection of the applicant’s claims based on obviousness under 35 U.S.C. §103 in light of the Supreme Court’s decision in KSR v. Teleflex, 127 S.Ct. 1727, 82 USPQ2d 1385, (2007). The applicant claims a consumer electronics device which uses bioauthentication for authenticating use of a sub-credit line account. Applicant’s claim 5, on which the applicant’s application stands or falls, reads:

5. A consumer electronics device, comprising A memory which stores account information for an account holder and sub-credit limits and bioauthentication information for authorized users of the account; A bioauthentication device which provides bioauthentication information to the memory; A communication link; and A processor, which compares received bioauthentication information to stored bioauthentication information to detect a match, and finds an associate sub-credit limit corresponding to the received bioauthentication information, to enable a purchase over the response network via a communication network up to a maximum of the sub-credit limit, the processor sending the account holder information over the communication link only if the match is detected and the sub-credit limit is not exceeded.

However, the Board rejected the examiner’s narrow interpretation of the recited location of the memory within a consumer electronics device. Specifically, the Board found that the preamble does not require a unitary body such that claim 5, when read broadly, did not require a local storage for memory. The Board relied upon the frequency with which various components in consumer electronics devices are not in unitary devices, such as where a base station is sold with a remote control. The Board further relied upon the Specification, which describes a remote server processing the bioauthentication data such that the device itself is not necessarily limited to a single body. Without this requirement for a local memory as opposed to a memory, the Board found that the Nakano patent disclosed a memory within the meaning of claim 5. Hence, the only limitation not found in the Nakano patent is that Nakano’s authentication is provided by a password and not a bioauthentication device as in claim 5.

The examiner also found that the Harada patent discloses a remote control which uses bio-authentication information in the form of a fingerprint gathered on the remote itself. Thus, the Harada patent discloses “the use of a bioauthentication device (fingerprint sensor) on a consumer electronics device (remote control) to provide bioauthentication information (fingerprint)”

The examiner also found that the Dethloff patent discloses a consumer electronics device which uses a voice sensor as bioauthentication in use with sub-account activation. The Dethloff patent, therefore, teaches “substitut[ing] a PIN authentication with bioauthentication to enable a user to access credit via a consumer electronics device.”

The examiner’s finding of fact also concluded that Dethloff and Nakano indicated the art suggested a common usage of personal codes or personal identification numbers to identify or authenticate users and that Harada and Dethloff indicated one of ordinary skill would be familiar with using bioauthentication interchangeably with PINs to authenticate users.

In affirming the examiner’s decision to reject the claims, the Board reviewed the "functional approach" of Hotchkiss, 11 How. 248 as reaffirmed by the Supreme Court in KSR v. Teleflex, 127 S. Ct. 1728, 82 USPQ2d 1385 (2007). Under this functional approach, the obviousness inquiry takes a flexible view that a combination patent is not obvious when “the improvement is more than the predictable use of prior art elements according to their established functions,” i.e. a combination of familiar elements using known methods “does no more than yield predictable results.” KSR. When a patent is altered by substitution of one element for another known in the field, “the combination must do more than yield a predictable result” in order to be non-obvious. United States v. Adams, 383 U.S. 39, 40, 148 USPQ 479, 480 (1966) (cited with approval in KSR as an illustrative example of the functional approach).

In reviewing the examiner's decision, the applicant made no suggestion that using bioauthentication in this invention yielded an unexpected result or that it was beyond the skill of one having ordinary skill in the art. The Specification did not contain a detailed description of implementation in hardware or software for the device, and was written in generalities. Such generality supported the finding that including a bioauthentication device into a consumer electronic device was not uniquely challenging.

In light of the Nakano and Harada patents, the Board found it was obvious to “update the Nakano device with the modern authentication components of the Harada bioauthentication means and thereby gaining, predictably, the common understood benefits of such adaptation, that is, a secure and reliable authentication procedure.” The Board further supported its decision because the Dethloff patent shows substituting PIN authentication with voice authentication, which is a form of bioauthentication. Moreover, there was evidence that bioauthentication was known in the art of authentication at the time of the invention as well as the interchangability and substitutability was known in the art. Thus, this known substitutability indicated it was known to replace PIN authentication with bioauthentication for the purpose of enabling a user access to credit.

The Board rejected applicant’s “repeated” arguments that there must be a teaching, suggestion, or motivation (TSM) in the prior art directing one skilled to make the improvement. The TSM test was recognized as useful by the Supreme Court in KSR, but was not a necessary finding to support obviousness. Instead, a court may “take account of the inferences and creative steps that a person of ordinary skill in the art would employ.” As such, while the TSM test was not required to find obviousness, the Board went on to find a motivation to use bioauthentication in light of the numerous advantages of bioauthentication over other forms of authentication as disclosed in the Harada patent. These advantages included reliability, and ensuring use by an authorized user. The finding of facts also found that the advantages of bioauthentication included protection against theft and that it was not susceptible to a user’s forgetfulness. Thus there was motivation to combine because “Dethloff teaches that one can substitute bioauthentication information for PIN information, and Harada teaches that it was a common problem at the time of the invention to create a remote control that would reliably ensure that the appropriate person was given access to the system. The use of a fingerprint scanner, such as disclosed in Harada, was an obvious solution to provide a more reliable means of identification than the PIN code in Nakano.” Therefore, the Board found that there was a motivation to make the combination, which further supported the obviousness rejection.

Designation of Drawings Discussed in Background Creates Presumption That Is Prior Art Under 35 U.S.C. §102
In Ex parte JI-YOUNG LEE, Appeal No. 2006-2328 (February 23, 2007) (non-presidential), the application under appeal is a reissue of U.S. Patent 6,064,443, issued May 16, 2000, to Ji-Young Lee entitled "Method for Detecting and Separating Vertical and Horizontal Synchronous Signals from Computer System," based on Application 08/880,675, filed June 23, 1997. Among the issues on appeal was the final rejection of claim 58.

During prosecution, the applicant had amended Figures 1 and 2A-2C to replace the “Prior Art” label with the "Background Art." When the Examiner contested this revision, the applicant successfully petitioned to have the change made. Since the drawings were amended, the Examiner concluded that Figures 1 and 2A-2C were not "prior art" because Appellant identifies it as "Background Art.”

On its own initiative and after the existing rejection of claim 58 was reversed, the Board requested that the counsel for the applicant explain at oral argument "what was meant by 'background art' in Figures 1 and 2A-2C." While the Board was unclear on counsel's answer, the Board interpreted counsel's response to be that "prior art" is only an appropriate label where the depicted device is from a publication. In response, the Board noted that non-publications can be prior art, such as prior art under 35 U.S.C. §§ 102(f)/103(a). Since counsel was unable to provide a satisfactory explanation as to whether the "Background Art" in Figures 1 and 2A-2C were prior art under other categories of 35 U.S.C. §102, the Board then requested that counsel "submit a paper within a week clarifying the nature of the subject matter of Figures 1 and 2A-2C."

After oral argument, counsel for the applicant responded by noting that the original correspondence had been destroyed, and that there was no evidence as to the source for the subject matter of the "Background Art" in Figures 1 and 2A-2C. Instead, applicant argued:

1. No section of § 102 disqualifies a patent application if the subject matter was based on what anyone else in the foreign country may or may not have known.
2. § 102(f) does not concern itself with the knowledge "of another" regarding the subject mater sought to be patented.
3. "Whether Figs, 1-2C constitute 'Prior Art' hinges only on an inquiry of whether or not the subject matter of Figs. 1-2C was published in this or a foreign country, or was known or used by others in this country."

The issue is whether applicants can be required to admit or deny that the subject matter is "prior art." It is a common problem in the USPTO that applicants describe or label subject matter as "background art," or "related art," or as "conventional," but do not "admit" that it is "prior art.” That is the situation in this case. The Examiner presumed that the figures labeled "Background Art" were not "Prior Art" because Appellant did not use that exact terminology. Although terms like "background art" (or "related art" or "conventional" or some other term) suggest an admission that the subject matter is "prior art" to the applicant, the admission is not clear. If subject matter designated "background art" (or some other term) is "prior art" or is evidence of knowledge of the level of skill in the art, it is manifestly highly relevant to the issue of patentability. In our opinion, it is in the public interest for the USPTO to require applicants to admit or deny that the subject matter is "prior art."

Therefore, the Board held that, subject to rebuttal by the applicant, any device or method described in the background of the invention is presumed to be eligible for use in a prior art combination under 35 U.S.C. §103. Based upon this presumption and since no rebuttal was included in the record, the Board directed that a new obviousness rejection be made for claim 58 using the presumed prior art of FIGs. 1 and 2A-2C.

No "Technological Arts" Test to Determine Statutory Subject Matter Under 35 U.S.C. §101
Ex parte Carl A. Lundgren, Appeal No. 2003-2088 (Bd. Pat. App. & Inter., heard April 20, 2004, decision issued October 2005) (precedential).

Lundgren filed U.S. Patent Application No. 08/093,516 on July 16, 1993, claiming the benefit of a series of continuation applications going back to 1988 for a method of compensating a manager who exercises administrative control over operations of a privately owned firm in an oligopolistic industry comprising, inter alia, the step of transferring compensation to the manager. The title of the application refers to a "Method and Apparatus," but no apparatus is disclosed or claimed.

In prior Appeal No. 96-0519, the Board of Patent Appeals and Interferences reversed the examiner's rejection of all of the claims under 35 U.S.C. §101 as being directed to non-statutory subject matter. The Examining Corps filed a request for reconsideration and rehearing, listing the following two issues for reconsideration:

1. Whether the invention as a whole is in the technological arts
2. Assuming that the invention is in the technological arts, whether the claim transferring compensation to a manager is a practical application.

In further prosecution, the examiner again rejected all of the claims as being directed to non-statutory subject matter under 35 U.S.C. §101, stating as follows:

both the invention and the practical application to which it is directed to be outside the technological arts, namely an economic theory expressed as a mathematical algorithm without the disclosure or suggestion of computer, automated means, apparatus of any kind, the invention as claimed is found non-statutory.

The rejection was predicated on two assertions by the examiner—that the claims fail to produce a useful, concrete, and tangible result (later withdrawn by the Examiner), and that the claims are not limited to the technological arts as required by 35 U.S.C. §101.

Lundgren filed a second appeal to the Board, and an expanded panel of the Board heard oral argument on April 20, 2004.

In a rare precedential opinion issued in October 2005, a 3–2 majority consisting of Chief Administrative Patent Judge (APJ) Fleming, Vice Chief APJ Harkcom, and APJ Hairston reversed the examiner's rejection of the claims as being directed to non-statutory subject matter under 35 USC 101 in an eight-page per curiam opinion. The majority stated that the only issue for review in the appeal was, to use the examiner's terminology, "whether or not claims 1, 2, 6, 7, 19-22, 32, and 35-40 are limited to the technological arts, as required by 35 U.S.C. § 101."

The majority noted that claim 1 is directed to a process, one of the four statutory classes of subject matter listed in 35 U.S.C. § 101 which provides as follows:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain patent therefor, subject to the conditions and requirements of this title.

The majority then reviewed these three cases, and found that they did not support the examiner's separate "technological arts" test, stating as follows:

Our determination is that there is currently no judicially recognized separate "technological arts" test to determine patent eligible subject matter under § 101. We decline to create one. Therefore, it is apparent that the examiner's rejection can not be sustained.

In a five-page dissenting opinion, APJ Jerry Smith took the position that the issue presented by the examiner was one of first impression, and disagreed with the majority's apparent position that all categories of non-statutory subject matter have been established (i.e., laws of nature, physical phenomena, and abstract ideas).

APJ Smith warned the majority that their position that essentially anything that can be claimed as a process is entitled to a patent under 35 U.S.C. §101 "opens the floodgate for patents on essentially any activity which can be pursued by human beings without regard to whether those activities have anything to do with the traditional sciences or whether they enhance the technological arts in any manner." APJ Smith took the position that the appropriate forum for deciding the question at issue in this case is the federal judiciary, and urged that the examiner's rejection be sustained so that the federal judiciary will have a chance to decide the question. He also joined APJ Barrett in urging the Board to enter a new ground of rejection under 35 U.S.C. 101.

In a massive sixty-five-page single-spaced concurring-in-part and dissenting-in-part opinion, APJ Barrett agreed with the majority that there is no separate "technological arts" test. However, in an exhaustive legal analysis of statutory subject matter reaching back to the British Statute of Monopolies of 1623, 21 Jac. 1, ch. 3., APJ Barrett vigorously dissented with virtually every other statement made by the majority and concluded that claim 1 is not directed to statutory subject matter under 35 U.S.C. § 101 for numerous other reasons, and urged that the Board enter a new ground of rejection under 35 U.S.C. § 101 for those reasons.

BPAI outlines requirements for Examiner's to maintain prima facie rejection of claims under 35 U.S.C. §112, first paragraph, for a genus where specification describes at least one species of the genus
In an appeal from a final rejection, the Board of Patent Appeals and Interferences reversed rejections based on both the written description and enablement requirements of 35 U.S.C. § 112, first paragraph, and entered a new ground of rejection under 35 U.S.C. § 112, second paragraph for one of the claims. The Board found that the claims were directed to a naturally occurring amino acid (or polynucleotide) sequence at least 95% identical to the disclosed amino acid (or polynucleotide) sequence and met the written description requirement. The Examiner has rejected claims for failing to comply with the written description requirement, asserting that the specification provides only a single representative species – the polynucleotide of SEQ ID NO: 2, and fails to disclose any structure-function relationship in this species. The Examiner also rejected the claims for failing to comply with the enablement requirement, asserting that because the specification does not teach the specific amino acids and structural motifs in the proteins encoded by the claimed polynucleotides that are essential for protein activity (specifically, malate dehydrogenase activity), the amount of experimentation required to make the claimed polynucleotides was undue. In response, the Appellants contended that because the claims at issue recite polynucleotides having a naturally occurring polynucleotide sequence, or that encode a polypeptide having a naturally occurring amino acid sequence, "through the process of natural selection, nature will have determined the appropriate amino acid sequences."

On appeal, the Board sided with the Appellants on whether the claims were supported by the specification for the purposes of 35 U.S.C. §112, first paragraph. Specifically, on the issue of written description, the Board noted that "[t]he written description requirement . . . does not require a description of the complete structure of every species with a chemical genus." While the Examiner asserted that the disclosure of the single disclosed species does not disclose the structure sufficient to support a genus, the Board found there was insufficient evidence to maintain a rejection under 35 U.S.C. §112, first paragraph, for lack of written description since "the examiner has not adequately explained and/or provided evidence to support that assertion."

Similarly, with regard to the enablement rejection, the Board disagreed with the Examiner's assertion that in order to satisfy this requirement, the specification must provide guidance regarding the specific amino acid residues that are tolerant to change without affecting malate dehydrogenase activity. Instead, the Board deemed persuasive the Appellants' argument that because the claims were limited to naturally occurring sequences, nature will have determined the amino acid residues that are tolerant to change (i.e., naturally occurring variants will presumably retain malate dehydrogenase activity). In particular, in reversing the Examiner's enablement rejection, the Board determined that the Examiner had not provided sufficient evidence that a naturally occurring polypeptide that is at least 95% identical to the amino acid sequence of SEQ ID NO: 1 or a polypeptide encoded by a naturally occurring polynucleotide sequence that is at least 95% identical to the polynucleotide sequence of SEQ ID NO: 2 would not retain malate dehydrogenase activity. As such, for the purposes of satisfying 35 U.S.C. §112, the disclosure of a natural sequence in and of itself is generally sufficient for disclosing a variance for that sequence, and the Examiner is required to provide evidence that such disclosure is insufficient in order to maintain a prima facie case of failure to comply with 35 U.S.C. §112, first paragraph. Ex parte Bandman, No. 2004-2319, (BPAI January 2005) (Non-Precedential).

BPAI interprets closed transition phrase for method claims
In a case involving processes for preparing an organic electroluminescent element, the patent examiner issued a rejection for indefiniteness under 35 USC 112, second paragraph. The examiner indicated that the claimed language of "consisting essentially of" is accepted as "excluding any further steps which materially affect the process." The examiner further stated that since dependent claims 43, 44, 55 and 56 require the further step of forming a sealing membrane which would affect the claimed process, therefore, these claims contradict "two mutually exclusive limitations." On appeal at the Board of Patent Appeals and Interferences (BPAI), the Board reversed the examiner. In a non-precedential opinion, the Board held that the phrase "consisting essentially of" does not "limit the claim to only those steps recited in the claim," Ex parte Hoffman, 12 USPQ2d 1061, 1063 (BPAI 1989), as would a phrase such as "consisting solely of." In fact, according to the Board, the phrase, "consisting essentially of" does not necessarily limit the claims so as to exclude other things when the specification clearly indicates that other constituents may be present. The Board found that limitations described in the dependent claims were disclosed in the specification. As such, the Board concluded that those elements cannot contradict the basic characteristics of the invention as suggested by the Examiner. Ex parte Hideaki Ueda, Appeal No. 2004-1584 (BPAI November 18, 2004) (Non-Precedential).

Means-Plus-Function Claim
Limitation in claim for image processing apparatus that recites “a destroying member for destroying said thermally processed film after said film has been scanned” is means-plus-function limitation, since term “a destroying member” is provided within functional context to describe functional feature of destroying thermally processed film after it has been scanned, and as such is permissible under narrow rule of construction of 35 U.S.C. §112, sixth paragraph. (Sanada v. Reynolds, 67 USPQ2d 1459, Bd Pat App & Int (unpub), 3/19/03).