Ex Parte Erisman

Patent Trial and Appeal Board

Aug 20, 2014

11776404 (P.T.A.B. Aug. 20, 2014)

UNITED STATES PATENT AND TRADEMARK OFFICE
___________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
___________

Ex parte TERRY ERISMAN
___________

Appeal 2012-000070
Application 11/776,404
Technology Center 3600
___________

Before MURRIEL E. CRAWFORD, ANTON W. FETTING, and
MEREDITH C. PETRAVICK, Administrative Patent Judges.
FETTING, Administrative Patent Judge.
DECISION ON APPEAL
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STATEMENT OF THE CASE1

1 Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed March 21, 2011) and Reply Brief (“Reply Br.,” filed July 11,
2011), and the Examiner’s Answer (“Ans.,” mailed June 10, 2011).
Terry Erisman (Appellant) seeks review under 35 U.S.C. § 134 of a non-
final rejection of claims 88 - 93 and 103 -114, the only claims pending in the
application on appeal. We have jurisdiction over the appeal pursuant to
35 U.S.C. § 6(b).
The Appellant invented a way of performing automated auctions by
bidding on items that are somewhat mutually exclusive, and/or performing
those types of auctions which are resolved on a collective basis with
reference to more than one demand constraint provided in a bid
(Specification 1:6-9).
An understanding of the invention can be derived from a reading of
exemplary claim 88, which is reproduced below [bracketed matter and some
paragraphing added].
88. A web based auction system interface
configured for performing I/O operations
through a browser
between
a bidder
and
an auction system operating on a server
computing system,
said web based auction system interface comprising:
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[1] an auction query interface
controlled by the server computing system
that is adapted for
user viewing of auction items
for an auction conducted by the auction
system
and
receiving user queries
through the browser
concerning said auction items,
and further for
retrieving one or more of said auction items
in response to such user queries;
and
[2] an auction bid entry interface
controlled by the server computing system
that is adapted for receiving user bids for said auction
items,
said auction bid entry interface including
both
a bid price entry field
and
a bid ranking field
for a first auction item that receives a user bid;
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[3] wherein said bid ranking field represents
a desired order
in which said bid for said first auction item is to be
resolved by the auction system
compared to
any other bids made by such bidder for other
auction items.
The Examiner relies upon the following prior art:
Fisher US 5,835,896 Nov. 10, 1998
Brett US 6,023,685 Feb. 8, 2000
Lange US 6,321,212 B1 Nov. 20, 2001
Wellman US 6,952,682 B1 Oct. 4, 2005
Sako US 7,181,405 B1 Feb. 20, 2007
Porat US 7,330,826 B1 Feb. 12, 2008
John M. Doyle, NYSE seeks OK for after-hours trading, Chicago Sun-
Times, May 20, 1991. (Hereinafter Doyle).
Henry Copeland, Telekom Group in $875 Million Deal in Hungary, The
New York Times, Decemebr 20, 1993. (Hereinafter Copeland).
Beverly Hills Country Club and MindSpring Announce an Agreement to
Launch internet Web site for Charity Actions, PR Newswire, June 23,
1998. (Hereinafter Beverly Hills Country Club).
Claims 88-90, 92, 93, 107, 112, and 114 stand rejected under 35 U.S.C.
§ 103(a) as unpatentable over Fisher and Wellman.
Claim 91 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Fisher, Wellman, and Doyle.
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Claims 103 and 105 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Fisher, Wellman, and Lange.
Claims 104, 106, and 109 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Fisher, Wellman, and Porat.
Claim 108 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Fisher, Wellman, and Copeland.
Claim 110 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Fisher, Wellman, and Brett.
Claim 111 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Fisher, Wellman, and Beverly Hills Country Club.
Claim 113 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Fisher, Wellman, and Sako.
ISSUES
The issues of obviousness turn primarily on the patentable weight
afforded and breadth of the limitation “said bid ranking field represents a
desired order in which said bid for said first auction item is to be resolved by
the auction system compared to any other bids made by such bidder for other
auction items.”
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FACTS PERTINENT TO THE ISSUES
The following enumerated Findings of Fact (FF) are believed to be
supported by a preponderance of the evidence.
Facts Related to the Prior Art
Fisher
01. Fisher is directed to conducting an interactive auction over an
electronic network. Fisher 1:7-9.
02. Fisher provides an electronic auction method and system for
presenting merchandise for sale at auction to customers over an
electronic network. Potential customers are presented with a
series of descriptive merchandise catalog pages through which
they may navigate to find items (lots) of interest. Upon finding a
lot of interest, customers may click a button on screen to display a
form for placing a bid on the lot. After submitting this bid, the
electronic auction system records the bid and updates the lot's
merchandise catalog page to show the current high bid or bids and
to whom such bids are attributable. When the auction is closed,
after a period of no bidding activity, at a predetermined time, or
when a desired sales volume is reached, the electronic auction
system notifies the winning and losing bidders by electronic mail
and posts a list of the winning bidders on the closed lot's
merchandise catalog page. Fisher 7:8-23.
03. Fisher runs on a central server host computer, attached to a
wide area network accessible by many potential customers
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through remote terminals. Potential customers are presented with
merchandise catalog pages, such as the one shown in FIG. 2,
generated by merchandise catalog page generator. Each
merchandise catalog page includes several action buttons that
allow the customer to move from catalog page to catalog page and
to place bids. Fisher 7:24-40.
Wellman
04. Wellman is directed to matching multi-attribute auction bids to
maximize an overall surplus. Wellman 1:7-10.
05. In some cases, a buyer and/or a seller may wish to negotiate
non-price attributes of the good or service, particularly in
business-to-business transactions. The price of the good or
service may be dependent at least in part upon these non-price
attributes. Such multi-attribute negotiation or auction may be
particularly useful and beneficial in, for example, procurement
transactions. Further, such multi-attribute or multidimensional
negotiation or auction may be among multiple sellers and multiple
buyers. However, conventional online auction mechanisms do not
provide for collection of multi-attribute bids from buyers and
sellers nor do they provide for optimal clearing of such multi-
attribute buyer and seller bids. What is needed is a system and
method for allowing systematic and simultaneous negotiation in
multiple dimensions. It is desirable to provide a system and
method for collecting multi-attribute bids from buyers and sellers.
Ideally, each attribute of the bid collected from buyers and sellers
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is specified in relation to a uniform quantification unit. It is
further desirable to provide a system and method for automated
clearing of the multi-attribute buyer and seller bids to result in an
optimal matching of buyer and seller bids. Wellman 1:27-49.
06. Wellman’s method of matching at least one multi-attribute bid
from one or more buyers and at least one multi-attribute bid from
one or more sellers generally comprises selecting a pair of bids
having a highest surplus between each buyer and each seller,
generating a weighted bipartite graph comprising buyer nodes and
seller nodes and an edge between each buyer node and each seller
node, each edge having the highest surplus of the pair of bids
between the buyer and seller as a weight, and determining
maximal weighted matching bids from the highest surplus pairs of
bids using the weighted bipartite graph. Wellman 1:65 – 2:8.
07. A best match or a best matching pair of offers between each
buyer and each seller is determined in step 506. In the example
shown in FIG. 1, a best match or the best matching pair of offers
is determined between each of Buyers A, B, C, and D and each of
Sellers A, B, and C such that a total of 12 best matches are
determined between the buyers and sellers. Wellman 7:29-35.
08. The best matching pair or bids between a buyer and a seller is
defined as the pair of bids having the greatest surplus among all
matching or compatible bids between the buyer and seller.
Matching or compatible bids have attribute values that are better
than what the buyer specified or not as good as what the seller
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specified, if the market system has such automatic attribute value
expansions feature for a given attribute. For example, a pair of
buyer and seller bids having matching or compatible attribute
values must necessarily have a seller price that is less than or
equal to the buyer price. The buyer price is in essence what the
buyer has specified as the maximum price the buyer is willing to
pay for a good or service having the associated set of attribute
values. Similarly, the seller price is in essence what the seller has
specified as the minimum price the seller is willing to accept for a
good or service having the associated set of attribute values.
Wellman 7:36-51.
09. After the best match between each buyer and each seller is
determined in step 506, a weighted bipartite graph is generated in
508 using the results of step 506. The weighted bipartite graph is
in turn used to determine a maximal weighted matching in step
510. Finally, the optimal matches are output in step 512. Thus, in
a periodic clearing mechanism, the market system outputs one set
of results in step 512 for each periodic clearing. Wellman 7:52-
60.
10. Determination of the maximal weighted matching of a weighted
bipartite graph, also known as the assignment problem, is well
known to those of ordinary skill in the art and described, in for
example, Ahuja, Ravindra K., Thomas L. Magnanti, and James B.
Orlin, "Network Flows: Theory, Algorithms, and Applications,"
1993. Wellman 10:40-46.
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Lange
11. Lange is directed to methods and system for trading financial
products having demand-based adjustable returns, and systems
and methods for determining those returns. Lange 1:20-24.
12. In such hypothetical financial products, a set of states is
typically chosen so that the states are mutually exclusive and the
set collectively covers or exhausts all possible outcomes for the
event. This arrangement entails that, by design, exactly one state
always occurs based on the event outcome. Lange 2:1-6.
13. Lange describes a scenario in which the states are defined as
discrete ranges of possible outcomes so that the entire distribution
of states covers all the possible outcomes—that is, the states are
collectively exhaustive. Lange 36:15-37; 58:47-66.
ANALYSIS
Initially, we find that although all claims recite some data entry field for
entering a bid ranking, none of the claims, aside from claims 107-114 recite
any further operational or functional use of such field. Even claims 107-114
recite no more than considering the field. Thus aside from claims 107-114,
the remaining claims recite only the mental interpretation of the contents of
the field. That is, the claims do no more than inform one of the aspired use
to which the contents might be put outside the scope of the claim.
In a non-precedential decision, our reviewing court reminded us of the
applicability of the precedential In re Gulack, 703 F.2d 1381 (Fed. Cir.
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1983), In re Bernhart, 417 F.2d 1395 (CCPA 1969) and In re Lowry, 32
F.3d 1579 (Fed. Cir. 1994) decisions.
We have held that patent applicants cannot rely on printed
matter to distinguish a claim unless “there exists [a] new and
unobvious functional relationship between the printed matter
and the substrate.” In re Gulack, 703 F.2d 1381, 1386
(Fed.Cir.1983). . . .

. . . .
. . . [T]he Board did not create a new “mental
distinctions” rule in denying patentable weight . . . . On the
contrary, the Board simply expressed the above-described
functional relationship standard in an alternative formulation—
consistent with our precedents—when it concluded that any
given position label’s function . . . is a distinction “discernable
only to the human mind.” . . . ; see In re Lowry, 32 F.3d 1579,
1583 (Fed.Cir.1994) (describing printed matter as “useful and
intelligible only to the human mind”) (quoting In re Bernhart,
. . . 417 F.2d 1395, 1399 (CCPA 1969)).

In re Jie Xiao, 462 Fed. Appx. 947, 950-52 (Fed. Cir. 2011) (Non-
precedential). Thus non-functional descriptive material, being useful and
intelligible only to the human mind, is given no patentable weight. See also
In re Ngai, 367 F.3d 1336, 1339 (Fed. Cir. 2004). “The rationale behind this
line of cases is preventing the indefinite patenting of known products by the
simple inclusion of novel, yet functionally unrelated limitations.” King
Pharmaceuticals, Inc. v. Eon Labs, Inc., 616 F.3d 1267, 1279 (Fed Cir
2010). (The relevant inquiry here is whether the additional instructional
limitation has a “new and unobvious functional relationship” with the
method, that is, whether the limitation in no way depends on the method,
and the method does not depend on the limitation).
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Here the operation of the recited web sites in claims 88-93 and 103-106
do not depend on the interpretation of the recited data entry field and the
contents of the field do not depend on the recited operation of the web site.
Were this limitation given patentable weight, nothing would prevent the
indefinite patenting of the prior art by the simple inclusion of novel, yet
functionally unrelated purposes the field might be put to.
Thus, as to claims 88-93 and 103-106, no patentable weight is afforded
the interpretation of the bid ranking field as a desired order. As to claims
107-114, it is sufficient that the art show some form of consideration of the
field in determining which bids to evaluate, according to the limitation in
independent claim 107.
The Examiner found that Wellman described additional fields beyond a
bid price in auction bid submission, and these fields were used in arriving at
a weighting that was applied in a bid matching algorithm. Ans. 4-6 and 20-
21. Also see FF 04-10. Thus Wellman described entering at least a second
field beyond the bid price field where the second field is used by Wellman’s
algorithm in bid matching.
We are not persuaded by the Appellant’s argument that Wellman’s data
fields do not affect ranking. App. Br. 9-13. No patentable weight is
afforded the mental interpretation of the field in question, as the field is not
recited in any operation. But even were we to grant weight to this
interpretation, Wellman’s field does influence the algorithmic bid selection
which necessarily affects the manner in which bids are matched, and thus
ranking. The limitation of “said bid ranking field represents a desired order
in which said bid for said first auction item is to be resolved by the auction
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system compared to any other bids” does not narrow or otherwise specify
the manner or degree of representation.
We are not persuaded by the Appellant’s argument that there is no
reason to combine the references. App. Br. 13. Wellman provides the
reasoning that many auctions are for multi-attribute items. Fisher simply
provides further implementation details.
Separately argued claim 107 recites
an auction status presentation interface controlled by the server
computing system and adapted to monitor and present progress
of auctions related to said one or more auction items, including
at least a tentative unconditional winning bid for an auction
item, and information identifying a number of conditional bids
for said auction item
Claim 107. This limitation does not use the so recited “tentative
unconditional winning bid” other than to present it to the user. Thus, again
this bid is non-functional and deserving of no patentable weight. We are
accordingly not persuaded by the Appellant’s argument that the art does not
describe this data element. Further, the Examiner found that
the prior art teaches (Fisher) teaches that it is old and well
known in the art for bids to be offered without condition and
that the highest bid is accepted… As for the limitation
"tentative" any bid submitted is inherently a tentative winning
bid up until it is accepted or declined.
Ans. 22. Thus, any auction system displays a tentative unconditional
winning bid at some point. We are not persuaded by the Appellant’s
argument that
overly broad interpretation fails to consider the explanation of
the term given the specification, which, as the Appellant
pointed out refers to the auction system's determination during
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resolution of the auction (see FIG. 2, box 225) that a specific
unconditional bid made by a user is designated (tentatively) as a
winning bid, at least until such time as another bid supercedes
(sic) it (see steps 250, 255 and 215).
Reply Br. 5. No lexicographic definition of the term is in the
Specification and we do not otherwise import the Specification into the
claims.
Though understanding the claim language may be aided by
explanations contained in the written description, it is important
not to import into a claim limitations that are not a part of the
claim. For example, a particular embodiment appearing in the
written description may not be read into a claim when the claim
language is broader than the embodiment.
Superguide Corp. v. DirecTV Enterprises, Inc., 358 F.3d 870, 875 (Fed.
Cir. 2004).
Separately argued claim 112 recites “wherein said site supports user bid
entries that include user-specified time expiration limitations.” We are not
persuaded by the Appellant’s argument that
Wellman at col. 8, ll. 15 - 22 merely indicates that the auction
process " ... may end when a certain time limit is reached." This
teaching by itself is insufficient to clarify if it is indeed a user-
specified time expiration limitation, or, instead, some system
defined/specified parameter.
App. Br. 15. The limitation does not narrow or specify the manner of
support, or even the degree of such support. Wellman’s passage cited supra
at least provides some degree of support, evidenced by the explicit recitation
of a time limit.
Separately argued claim 103 recites
said auction bid entry interface allows a user to enter a plurality
of mutually exclusive bids on a plurality of auction items to the
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computing system and the computing system is configured such
that the user is guaranteed to win at most one of said plurality
of auction items.
Claim 103. We are not persuaded by the Appellant’s argument that
there is no mention of" ... mutually exclusive bids" from a user,
or any notion that the system is configured so that the user is
"guaranteed to win at most" one item. Lange here discloses
something quite different, namely, that certain investors (not
bidders) can invest in different auction outcomes. Yet from the
plain language of the reference once can determine that the
investors are not participating in the auction itself, or presenting
a plurality of bids to the computing system as set out in the
above claims. Nor are they "guaranteed" to win at most one
item; they are in fact investing in all of the outcomes
App. Br. 15-16. The financial securities market is a known auction
market. Characterizing transactions as investment does not negate the
auction system operating. Further, any set of mutually exclusive events
guarantees at most one of those occurs.
CONCLUSIONS OF LAW
The rejection of claims 88-90, 92, 93, 107, 112, and 114 under 35 U.S.C.
§ 103(a) as unpatentable over Fisher and Wellman is proper.
The rejection of claim 91 under 35 U.S.C. § 103(a) as unpatentable over
Fisher, Wellman, and Doyle is proper.
The rejection of claims 103 and 105 under 35 U.S.C. § 103(a) as
unpatentable over Fisher, Wellman, and Lange is proper.
The rejection of claims 104, 106, and 109 under 35 U.S.C. § 103(a) as
unpatentable over Fisher, Wellman, and Porat is proper.
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The rejection of claim 108 under 35 U.S.C. § 103(a) as unpatentable
over Fisher, Wellman, and Copeland is proper.
The rejection of claim 110 under 35 U.S.C. § 103(a) as unpatentable
over Fisher, Wellman, and Brett is proper.
The rejection of claim 111 under 35 U.S.C. § 103(a) as unpatentable
over Fisher, Wellman, and Beverly Hills Country Club is proper.
The rejection of claim 113 under 35 U.S.C. § 103(a) as unpatentable
over Fisher, Wellman, and Sako is proper.
DECISION
The rejection of claims 88-93 and 103-114 is affirmed.
No time period for taking any subsequent action in connection with this
appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv) (2011).

AFFIRMED

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