E

UNITED STATES PATENT AND TRADEMARK OFFICE
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BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
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Ex parte PAUL J. FLETCHER and GARRY C. HEATH
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Appeal 2009-007416
Application 11/002,930
Technology Center 3600
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Decided: January 26, 2010
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Before ANTON W. FETTING, JOSEPH A. FISCHETTI, and BIBHU R.
MOHANTY, Administrative Patent Judges.
MOHANTY, Administrative Patent Judge.
DECISION ON APPEAL

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STATEMENT OF THE CASE
The Appellants seek our review under 35 U.S.C. § 134 (2002) of the
final rejection of claims 1 and 3-4 which are all the claims pending in the
application. We have jurisdiction under 35 U.S.C. § 6(b) (2002).
SUMMARY OF THE DECISION
We AFFIRM.
THE INVENTION
The Appellants’ claimed invention is directed a method of conducting
on-line business by providing a database that can be accessed by a seller to
determine a set price for non-fungible good (Spec. 4-6). Claim 1,
reproduced below, is representative of the subject matter of appeal.
1. A method of conducting on-line business, comprising:
providing a database that associates set prices with values of
parameters relating to specific classes of non-fungible used goods;
providing an interface through which a seller accesses data
from the database to determine a set price at which an on-line reseller
will purchase a particular non-fungible good; and
the reseller operating an automated purchaser that issues a firm
offer to purchase the non-fungible good at the set price, before
physically examining the good wherein the firm offer needs nothing
further than acceptance to create a binding contract.

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THE REJECTIONS
The Examiner relies upon the following as evidence in support of the
rejections:
Kocher 	US 2003/0061150 A1 	Mar. 27, 2003
The following rejections are before us for review:
1. 	Claims 1 and 3-4 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Kocher and Official Notice.
THE ISSUE
At issue is whether the Appellants have shown that the Examiner
erred in making the aforementioned rejections.
This issue turns on whether it would have been obvious to modify
Kocher in view of Official Notice to meet the argued claim limitations from
claim 1.
FINDINGS OF FACT
We find the following enumerated findings of fact (FF) are supported
at least by a preponderance of the evidence: 1
FF1. 	The Specification states that a non-fungible good is not: a new good in
new condition; a used good that has a standard price by virtue of a rating
system (e.g. a rated coin, diamond, or collectible); a share of stock or other
good where the value is not in the good itself. The Specification provides as
1 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).

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example of non-fungible goods: used cameras, used PDA’s, used cell phones
and used cars (Spec. 3:8-14).
FF2. 	The Specification states that the “words ‘firm offer’ and ‘fixed price
quote’ are intended to create a contractually binding offer if accepted. Thus
a seller can indicate his acceptance of a set price thereby creating a binding
contract for the sale of the good at the selling price” (Spec. 4:26-28).
FF3. 	Kocher had disclosed an electronic transaction system (Title) which
provides a method of electronic value determination and pawn brokering
(Abstract).
FF4. 	Kocher in paragraphs [0101-0103] describes a process where a
customer is connected to a reselling website. A value determination site 8
provides a price that the web site will pay for the item or thing. Appraisers
are then used to determine how close that estimate was to the reselling price,
and the value determination site updates its database.
FF5. 	Kocher in paragraph [0104] describes an alternative embodiment
using a basic expert system and/or artificial intelligence algorithms to
extrapolate the value and then the value determination site provides a price
estimate. Kocher states “This would be similar to a ‘Blue Book’ price for a
large spectrum of things and the price is backed by an instant offer to sell for
that price.”
FF6. 	Kocher states in paragraph [0105] that Fig. 5 depicts a detailed
operation of the warehouse site. A message included with the item or thing
is sent which includes the price estimate generated by the web site “along
with any special instructions.” Once the item or thing arrives at the
warehouse the receiver looks in the “special instructions” to see if the item
or thing requires simple inspection or a specialized appraiser. The selling

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customer is informed of the final price and the customer has the option to
accept the value or request the thing be shipped back.
PRINCIPLES OF LAW
“Section 103 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, 406
(2007). The question of obviousness is resolved on the basis of underlying
factual determinations including (1) the scope and content of the prior art,
(2) any differences between the claimed subject matter and the prior art, (3)
the level of skill in the art, and (4) where in evidence, so-called secondary
considerations. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). See
also KSR, 550 U.S. at 407 (“While the sequence of these questions might be
reordered in any particular case, the [Graham] factors continue to define the
inquiry that controls.”)
In KSR, the Supreme Court emphasized “the need for caution in
granting a patent based on the combination of elements found in the prior
art,” id. at 415-16, and discussed circumstances in which a patent might be
determined to be obvious. In particular, the Supreme Court emphasized that
“the principles laid down in Graham reaffirmed the ‘functional approach’ of
Hotchkiss, 11 How. 248.” KSR, 550 U.S. at 415, (citing Graham, 383 U.S.
at 12), and reaffirmed principles based on its precedent that “[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.

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The Court also stated “[i]f a person of ordinary skill can implement a
predictable variation, § 103 likely bars its patentability.” Id. at 417. The
operative question in this “functional approach” is thus “whether the
improvement is more than the predictable use of prior art elements according
to their established functions.” Id.
The Court noted that “[t]o facilitate review, this analysis should be
made explicit.” Id. at 418 (citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir.
2006) (“[R]ejections on obviousness grounds cannot be sustained by mere
conclusory statements; instead, there must be some articulated reasoning
with some rational underpinning to support the legal conclusion of
obviousness”). However, “the 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.” Id.
ANALYSIS
The Appellants argue that the rejection of claim 1 is improper because
Kocher fails to disclose the limitation in the claim requiring that the
automated purchaser “issues a firm offer to purchase the non-fungible good
at the set price …wherein the firm offer needs nothing further than
acceptance to create a binding contract” (Reply Br. 1). The Appellants
argue that Kocher’s paragraph [104] fails to disclose a “firm offer” that
“needs nothing further than acceptance to create a binding contract” (Br. 7).
The Appellants argue that having the price “backed” by a Blue Book price as
recited in [104] is not the same as a firm offer (Br. 8). The Appellants also
argue that Kocher in paragraphs [0038] and [0105] discloses that the price

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can fluctuate until a simple inspection or appraisal is performed which sets
the price (Br. 8). The Appellants further argue that Kocher instead teaches
issuing a tentative offer to purchase a non-fungible good at a proposed price,
then revalues the price after an appraisal, and then depending on the results
of the appraisal facilitates a negotiation between the buyer and seller (Reply
Br. 2). The Appellants additionally argue that they admitted that the Official
Notice was correct with respect to the sale of fungible goods but incorrect
when applied to non-fungible goods (Ans. 8-9).
In contrast, the Examiner has determined that Kocher does disclose
the argued claim limitations (Ans. 6-7). The Examiner has also determined
that the Appellants failed to traverse the taking of Official Notice properly
(Ans. 7-10) and that the rejection is proper (Ans. 10).
We agree with the Examiner. The Appellants are correct that Kocher
in paragraph [0103] describes a process where a customer is connected to a
reselling website where Appraisers are then used to determine how close that
estimate was to the reselling price, and then the value determination site
updates its database (FF4). However, Kocher in paragraph [0104] also
describes an alternative embodiment using a basic expert system and/or
artificial intelligence algorithms to extrapolate the value and then have the
value determination site provide the price estimate (FF5). Kocher also in
[0104] states “[t]his would be similar to a ‘Blue Book’ price for a large
spectrum of things and the price is backed by an instant offer to sell for that
price” which is consistent with a “firm offer to sell” before physical
examination of the goods meeting the cited claim limitation. The
Appellants’ arguments as to Kocher’s paragraph [0105] disclosing physical
appraisal before the price is set are also not taken. Note that Kocher in

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paragraph [0105] states that a message is sent which includes the price
estimate generated by the web site “along with any special instructions”
(FF6) which shows that the message may not include special instructions
and is not required to do so. Kocher discloses here that once the item or
thing arrives at the warehouse the receiver looks in the “special
instructions” to see if the item or thing requires as simple inspection or
specialized appraiser (FF6). Kocher in [0105] shows that instructions for a
physical appraisal are not required since the “special instructions” are
optional, thus meeting the cited argued claim limitation.
The Appellants also argue that they did not admit the Official Notice
to be prior art when applied to non-fungible goods (Br. 8). The Examiner has
taken Official Notice that it was well known in e-commerce to inspect an
item only after the purchase is complete in the Office Action of February 20,
2007. 	The Appellants provide no citation in their Appeal Brief to any
specific traversal in the subsequent response filed on May 9, 2007 to show
proper traversal of the Official Notice which was taken on February 20,
2007 by the Examiner. Regardless, a review of the Appellants’ May 9, 2007
response shows that no traversal was taken of the Official Notice by the
Appellants in the proper time frame as required. Regardless, the Appellants
have acknowledged that the Official Notice is correct when applied to
fungible goods and we hold that it would have been obvious for one of
ordinary skill in the art to also extend inspection until after purchase to non-
fungible goods as well to increase the speed of completing a transaction with
such goods. The modification of the process of Kocher to have inspection of
the non-fungible goods occur after purchase is considered an obvious,

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predictable modification to increase the speed of completing a transaction
with such goods.
For these above reasons the rejection of claim 1 is sustained. The
Appellants have not argued separately for dependent claims 3-4 and the
rejection of these claims is sustained for these same reasons.
CONCLUSIONS OF LAW
We conclude that Appellants have not shown that the Examiner erred
in rejecting claims 1 and 3-4 under 35 U.S.C. § 103(a) as unpatentable over
Kocher and Official Notice.
DECISION
The Examiner’s rejection of claims 1 and 3-4 is sustained.
AFFIRMED
MP
FISH &ASSOCIATES, PC
ROBERT D. FISH
2603 Main Street
Suite 1000
Irvine CA 92614-6232