Court Opinion

ID: 916
Source: CourtListenerOpinion
Date Created: 2010-03-30 04:10:16+00
Date Added: 2024-06-11T13:29:12.972482
License: Public Domain

NOTE: This disposition is nonprecedential.

   United States Court of Appeals for the Federal Circuit
                                         2009-1373
                                  (Serial No. 09/572,128)

                                 IN RE HENRY GLEIZER

      Henry Gleizer, of New York, New York, pro se.

     Raymond T. Chen, Solicitor, Office of the Solicitor, United States Patent and
Trademark Office, of Arlington, Virginia, for the Director of the United States Patent and
Trademark Office. With him on the brief were Sydney O. Johnson, Jr., and Scott C.
Weidenfeller, Associate Solicitors. Of counsel was Thomas W. Krause, Associate Solicitor.

Appealed from: United States Patent and Trademark Office
               Board of Patent Appeals and Interferences
                          NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit
                                         2009-1373
                                   (Serial No. 09/572,128)

                                  IN RE HENRY GLEIZER

          Appeal from the United States Patent and Trademark Office, Board of Patent
          Appeals and Interferences.

                             ____________________________

                              DECIDED: December 15, 2009
                             ____________________________

Before LOURIE, DYK, Circuit Judges, and KENDALL, District Judge. *

LOURIE, Circuit Judge.

          Henry Gleizer appeals from the final decision of the Board of Patent Appeals and

Interferences (“Board”) affirming the examiner’s rejection of all twenty claims of

appellant’s patent application as obvious under 35 U.S.C. § 103. Ex parte Gleizer, No.

2007-2033 (B.P.A.I. Mar. 6, 2008). Because the Board did not err in its decision, we

affirm.

                                      BACKGROUND

          Gleizer filed U.S. Patent Application 09/572,128 (the “’128 application” or

“Gleizer’s application”) on May 17, 2001, claiming priority from a provisional application

filed on August 27, 1999.        Gleizer’s application claims Systems and Methods for

          *
              Honorable Virginia M. Kendall, District Judge, United States District Court
for the Northern District of Illinois, sitting by designation.
Electronically Facilitated Transactions.      Claim 89 of the ‘128 application reads as

follows:

       89.    An automated transaction method for enabling a transaction of
       electronic funds and physical goods between a buyer and a seller, said
       automated transaction method comprising:

              a.      accessing information comprising:
                      (1) an electronic funds payment instrument information
                           corresponding to said transaction of said electronic
                           funds, and
                      (2) a shipping information corresponding to said transaction
                           of said physical goods, said shipping information
                           comprising a shipping address;
              b.      receiving said electronic funds using said electronic funds
                      payment instrument information;
              c.      printing a shipping label comprising said shipping
                      information, and a shipment tracking information;
              d.      checking a delivery status of said physical goods using said
                      shipment tracking information; and
              e.      disbursing said electronic funds to a party comprising a
                      customer selected from the group consisting of said seller
                      and said buyer.

       The patent examiner assigned to the ‘128 application issued a final rejection of all

pending claims. The examiner found that U.S. Patent 6,219,653 (“O’Neill”) taught all of

the limitations of claim 89 of Gleizer’s application, with the exception of “printing a

shipping label” as recited in subparagraph (c) of claim 89. The examiner cited U.S.

Patent 6,889,194 (“Kadaba”) as teaching that limitation. The examiner concluded that

one skilled in the art would have found the combination of O’Neill and Kadaba to have

been obvious.      The examiner therefore rejected claim 89.     Claims 98 and 101 are

independent claims that recite machines performing the method of claim 89.            The

examiner found that those claims were substantially similar to claim 89, and were also

obvious.    The remaining claims are dependent upon claims 89, 98, and 101.

Dependent claims 90 and 102 add a limitation that the “party” comprises a broker

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hosting the transaction. The examiner found that those claims were also substantially

similar to claim 89, and were obvious. Claim 91 and 103 add a limitation that the

electronic funds payment instrument information comes from a group that includes

different types of financial account information. The examiner found that the use of an

automated clearing house (“ACH”) in O’Neill teaches the claimed Markush group.

Claims 92, 97, 100, 104, and 108 add verification of payment and shipping information

and the use of such verified information in the claimed transaction method.           The

examiner found that O’Neill and Kadaba disclose the fact that such information can be

verified, thereby rendering those claims obvious.     Claims 93 and 105 add a claim

limitation for placing electronic funds in escrow. The examiner found that the use of an

escrow was well-known to those of ordinary skill in the art and that those claims would

have been obvious. For the same reason, the examiner also found claims 94, 95, 96,

99, 106, and 107 to be obvious. Gleizer appealed the examiner’s rejections to the

Board.

         The Board affirmed the examiner’s decision. On each of the claims at issue, the

Board agreed with the examiner that together O’Neill and Kadaba taught every limitation

of the claim.    The Board rejected Gleizer’s argument that there was no reason to

combine the two pieces of prior art cited by the examiner. The Board found that O’Neill

is directed to a freight calculation system and that generation of freight data presents a

need to print details of shipping transactions. The Board found that Kadaba is directed

to preparing electronic shipping records.     The Board noted that Kadaba expressly

describes how its disclosed shipping software permits parcel delivery companies to

provide their customers with an improved and more efficient service.          The Board

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                                        -3-
concluded this description would motivate one of ordinary skill in the art to use the

Kadaba software along with the automated system disclosed in O’Neill. The Board also

rejected Gleizer’s argument that there was a specific order required in the steps recited

in his rejected claims which would not have been obvious from the cited prior art. The

Board found Gleizer’s remaining arguments unpersuasive and affirmed the examiner’s

rejection of all the claims pending in Gleizer’s application.

       Gleizer filed a request for rehearing at the Board which was denied. Gleizer

timely appealed the Board’s decision.          We have jurisdiction pursuant to 28 U.S.C.

§ 1295(a)(4)(A).

                                       DISCUSSION

       Section 103 of title 35 of the U.S. Code “forbids issuance of a patent when ‘the

differences between the subject matter sought to be patented and the prior art are such

that the subject matter as a whole would have been obvious at the time the invention

was made to a person having ordinary skill in the art to which said subject matter

pertains.’” KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 405 (2007) (quoting 35 U.S.C. §

103). “Determination of obviousness under 35 U.S.C. § 103 is a legal conclusion based

on underlying facts.” In re Kumar, 418 F.3d 1361, 1365 (Fed. Cir. 2005). This court

reviews “the Board’s ultimate determination of obviousness de novo,” while the Board's

underlying findings of fact are reviewed under a substantial evidence standard. In re

Kotzab, 217 F.3d 1365, 1369 (Fed. Cir. 2000).

       On appeal, Gleizer presents the same arguments that he presented to the Board.

Primarily, Gleizer argues that the examiner failed to make a showing of an apparent

reason to combine the elements known separately in the prior art in a fashion claimed

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by his patent application. Gleizer contends that the Board failed to articulate such a

reason, instead citing “mere conclusory statements” such as “more efficient service,”

“design need,” and “market pressure” as motivations to combine the known elements.

       In response, the Director of the Patent and Trademark Office (“PTO”) argues that

Gleizer’s claims are nothing more than a predictable variation of elements disclosed in

O’Neill and Kadaba.       Such a predictable combination is unpatentable under the

Supreme Court’s decision in KSR. Moreover, the Director argues, the Kadaba shipping

software system purports to permit improved and efficient service for a shipping

customer, thereby providing a reason for an automated transactions system such as the

one in O’Neill to make use of it.

       We agree with the Director. Under KSR, “[t]he combination of familiar elements

according to known methods is likely to be obvious when it does no more than yield

predictable results.”   Id. at 416.   In KSR, the Court offered guidance on when a

combination might be obvious under § 103:

       When there is a design need or market pressure to solve a problem and
       there are a finite number of identified, predictable solutions, a person of
       ordinary skill has good reason to pursue the known options within his or
       her technical grasp. If this leads to the anticipated success, it is likely the
       product not of innovation but of ordinary skill and common sense. In that
       instance the fact that a combination was obvious to try might show that it
       was obvious under § 103.
550 U.S. at 421. Under KSR, we conclude that Gleizer’s proposed combination of

elements from O’Neill and Kadaba would have been obvious to a person of ordinary skill

in the art.

       Gleizer also argues that for each of the claims at issue, the cited prior art does

not teach every limitation of the claim. Regarding claim 89, Gleizer argues that neither

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                                         -5-
O’Neill nor Kadaba teaches the use of electronic funds payment instrument information

and shipping information in the same manner as Gleizer has claimed in limitations (b),

(c), and (d). However, we find that the Board specifically addressed each of those

limitations in its order. The Board explained that O’Neill discloses how electronic funds

transfer information is accessed and used to enable a payee to receive a payment,

similar to the funds transfer step claimed in limitation (b) of claim 89. See Ex parte

Gleizer, No.2007-2033, slip op. at 13. The Board noted that in one embodiment, O’Neill

discloses tracking of shipments prior to transfer of funds for the shipment, similar to the

tracking step claimed in limitation (d). Id. at 14. The Board agreed with the examiner

that claim limitation (c), related to printing a label with shipping information, was taught

by Kadaba. Id. at 11. We agree with the Board that the prior art teaches every single

limitation of claim 89.

       Gleizer argues that even if every limitation of claim 89 is found in the prior art, the

claim also requires a specific sequence that is not taught by the prior art. He argues

that his claimed method requires that electronic funds be received from the buyer before

the purchased goods are shipped. To support his proposition, Gleizer points to the fact

that the specification describes the steps in a sequence. In response, the Director

argues that the PTO is required to give claims their broadest reasonable interpretation

and that it would be improper for the PTO to read Gleizer’s suggested sequential

limitation into his application’s claims.

       We have held that unless the steps of a method actually recite or implicitly

necessitate a specific order, the steps are not ordinarily construed to require one.

Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1342–43 (Fed. Cir.

2009-1373
                                            -6-
2001). We agree with the Board that Gleizer has failed to show how a sequence of

steps described in one embodiment mandates a narrow construction of the claim. See

In re Bigio, 381 F.3d 1320, 1325–26 (Fed. Cir. 2004) (“Absent claim language carrying a

narrowing meaning, the PTO should only limit the claim based on the specification or

prosecution history when those sources expressly disclaim the broader definition.”).

We therefore agree that the Board properly affirmed the examiner’s rejection of claim

89.

      Gleizer argues that claims 98 and 101 claim “interfaces” that are functionally

different from those taught in O’Neill. According to Gleizer, O’Neill is non-analogous art

directed to an entirely different problem from that solved by his invention. In response,

the Director contends that O’Neill teaches the use of a computer communication

network to carry out its trading system, and therefore that O’Neill inherently teaches

interfaces for inter-process communications like those claimed in Gleizer’s application.

The examiner found that both O’Neill and Gleizer’s application relate to electronic funds

transfer and transaction of goods and that O’Neill was analogous art to Gleizer’s

claimed invention.   Thus, the examiner concluded that the use of interfaces taught in

O’Neill rendered claims 98 and 101 obvious.        The Board affirmed the examiner’s

decision. Ex parte Gleizer, No. 2007-2033, slip op. at 23.

      We agree with the Board that a person of ordinary skill in the art would have

considered O’Neill to be related to the same subject matter as the claims at issue.

KSR, 550 U.S. at 1741 (“[T]he analysis need not seek out precise teachings directed to

the specific subject matter of the challenged claim, for a court can take account of the

inferences and creative steps that a person of ordinary skill in the art would employ.”).

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                                        -7-
Given that the system disclosed in O’Neill teaches transfer of data between its various

components, the use of the claimed interfaces would in fact have been obvious to a

person of ordinary skill in the art.

        Regarding claims 90 and 102, Gleizer argues that there was no evidence to

support the Board’s finding that the ACH disclosed in O’Neill teaches funds being

disbursed. Gleizer argues that the prior art only teaches transfer of electronic funds

between trading clients, and does not teach a broker who could host a seller-buyer

transaction. In response, the Director argues that O’Neill teaches an accounting server

that facilitates electronic funds transfer between a seller, a buyer, and optionally a bank

using an ACH. The Board found that processing disbursements through an ACH is a

well known mechanism that clearing houses employ. Ex parte Gleizer, No. 2007-2033,

slip op. at 24. In light of this teaching, it was proper for the Board to find claims 90 and

102 to have been obvious.

       Gleizer next argues that claims 92 and 104 would not have been obvious

because the use of verified payment and shipping information was not taught in the

prior art. Gleizer concedes that Kadaba teaches verification of zip code information, but

argues that that is not the same as verification of shipping or payment information

corresponding to a specific customer. The Director responds that a zip code is part of

any shipping information, and the rejected claims do not in any way limit the scope of

the claimed verification.     Moreover, the Director points out, ONeill also addresses

verification of invoices. We agree with the Director that the prior art contains sufficient

teaching to have rendered the verification of payment and shipping information obvious

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                                         -8-
to a person of skill in the art. For the same reason, we affirm the Board’s conclusion

that claims 97, 100, and 108 would also have been obvious.

       With regard to claims 93 and 105, Gleizer argues that the use of an escrow

account with the claimed system would have been nonobvious. Gleizer argues that the

Board engaged in improper hindsight in reaching its conclusion of obviousness because

that limitation is clearly not found in the cited prior art. In response, the Director argues

that in rejecting these claims, the examiner took official notice that escrowing was well

known in the art. The Director notes that Gleizer failed to object to the examiner’s

notice. Therefore, the Director urges us to affirm the Board’s decision.

       We have held that “[a]n obviousness determination is not the result of a rigid

formula disassociated from the consideration of the facts of a case” and that the

“common sense of those skilled in the art demonstrates why some combinations would

have been obvious where others would not.” Leapfrog Enters. v. Fisher-Price, Inc., 485
F.3d 1157, 1161 (Fed. Cir. 2007). Adding an escrow account to the cited prior art would

have been common sense and reasonably obvious to one of ordinary skill in designing a

system for transaction of goods using electronic funds.

       We also reject Gleizer’s argument that the Board improperly applied KSR in its

decision given that Gleizer had briefed his case prior to the Supreme Court’s decision in

KSR.    Gleizer argues that in the absence of the Supreme Court’s decision, the claims

that the examiner had previously rejected would “pass into allowance.” The Director

argues that Gleizer had an opportunity to present any new arguments to the Board in

response to KSR, but failed to avail himself of that opportunity. We agree. Gleizer

failed to make any substantive arguments based on KSR in his request to the Board for

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                                         -9-
rehearing. Moreover, the Board was bound to give the holding in KSR “full retroactive

effect in all cases still open on direct review and as to all events, regardless of whether

such events predate or postdate [the] announcement of the rule.” Harper v. Va. Dep't of

Taxation, 509 U.S. 86, 97 (1993).

       We have considered Gleizer’s remaining arguments and find them unpersuasive.

For the foregoing reasons, the Board correctly affirmed the examiner’s rejection of

claims 89-118 of Gleizer’s application. Its factual findings were supported by substantial

evidence and its conclusions of law were not incorrect. Accordingly, we affirm.

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