Board of Patent Appeals and Interferences
Patent and Trademark Office (P.T.O.)
*1 EX PARTE JOSEPH C. MURRAY
Appeal No. 622-49
July 26, 1988
Application for Patent filed November 17, 1980, Serial No. 207,438, which is a Continuation-in-Part of Serial No. 067,367, filed August 17, 1979, now abandoned. Accounting Method For Providing Periodic Expense Analysis Statements Utilizing Indicia For Identifying the Purpose of Expenditures.
Anthony D. Cennamo, for appellant
Primary Examiner--Paul A. Bell
Torchin, Craig, McCandlish, Tarring, W. Smith and Kimlin
This is an appeal from the final rejection of claims 12-15, all the claims remaining in the application. Claim 12, which is sufficiently illustrative, follows:
12. An accounting method utilizing a financial institution's documents, each having an account number and other information preprinted thereon, and a designated area for a user entry, comprising:
a. entering into said designated area one of a plurality of pre-selected identifying indicia to identify the nature and the purpose of the expenditure made with a particular document,
b. converting said user's pre-selected identifying expenditures into a periodic expense analysis statement, further including steps of:
c. sorting said expenditures in accordance with said user's account number and identifying indicia entered by said user in said designated area on said documents, and thereafter,
d. correlating, tabulating, and storing said sorted identified expenditures in sequence and operational function as predesignated by said financial institution for verification of the validity of said expenditures,
e. said periodic expense analysis statement having a plurality of vertically spaced columns, and wherein each of said columns is subdivided in accordance with the number of said identifying indicias,
f. entering all of one of said sorted expenditure identifying indicias in one of said subdivisions and thereafter entering all of another of said sorted indicias in respective other subdivisions of said columns, until all of the indicias are entered,
g. debiting into adjacent vertically spaced columns the amount and entering other information related to said expenditure identified by said indicias, and positioning said debited amount and other information entries in alignment with said identifying indicias,
h. sub-totalling each of said amounts of said expenditures for like identifying indicia and entering said subtotals on said statement adjacent to said sorted indicia entered in said subdivided column,
i. totaling said subtotals and said totals on said statement and entering below said subtotals,
j. printing and issuing said expense analysis statement to said user.
The appealed claims stand rejected under the first paragraph of 35 U.S.C. 112 on the ground that the specification, as originally filed, does not provide support for the invention as now claimed. The claims on appeal also stand rejected under 35 U.S.C. 101 as being directed to non-patentable subject matter.
*2 We first consider the rejection under the first paragraph of 35 U.S.C. 112. Lines 18-21 of claim 12 require that the periodic expense analysis statement have "a plurality of vertically spaced columns." The examiner states: "There is no teaching in the disclosure, as originally filed, that there is more than one vertically spaced column. See Figure No. 3 (as originally filed)." We do not agree. Originally filed Figure 3 depicts two vertically spaced columns on either side of the heading "SUB-TOTAL OF EACH PURPOSE." Insofar as "a plurality" of such columns includes two, we find original Figure 3 supportive of the criticized claim language. Accordingly, we will not sustain the rejection under 35 U.S.C. 112, first paragraph.
We now turn to the rejection under 35 U.S.C. 101. We begin our analysis with the recognition that a series of steps is a "process" within the meaning of § 101 unless it falls within a judicially determined category of nonstatutory subject matter exceptions. As always, the claimed invention, in its entirety, must be evaluated for what it is. In re Sarkar, 588 F.2d 1330, 200 USPQ 132 (CCPA 1978). At issue here is whether the claimed accounting method defines such a judicially determined exception. As stated by our predecessor review court in In re Chatfield, 545 F.2d 152, 191 USPQ 730 (CCPA 1976), "Some inventions, however meritorious, do not constitute patentable subject matter, e.g., ... methods of doing business, In re Wait, 22 CCPA 822, 73 F.2d 982, 24 USPQ 88 (1934)." Considering the claimed method as a whole, it becomes apparent that appellant is seeking patent protection on a method of conducting business, or providing a banking service, between a financial institution and its customers. According to page 6 of the specification herein, the "expense analysis statement" generated by the claimed method "provides a running record for the user with his own identification of the nature and purpose of the purchase." At page 7 of the specification appellant explains that an object of the invention is
"to provide a credit card/check expense analysis accounting that readily adapts itself to the state-of-art computer customer information storage and readout verification, both by the merchant upon the customer making an expenditure and by the credit institution in compiling the periodic accounting of expenditures as per customer breakdown."
While it may in some situations be problematic to ascertain what falls within the penumbra of the judicially prescribed "method of doing business", [FN1] we find no such difficulty in the present case. We are convinced that the claimed accounting method, requiring no more than the entering, sorting, debiting and totaling of expenditures as necessary preliminary steps to issuing an expense analysis statement, is, on its very face, a vivid example of the type of "method of doing business" contemplated by our review court as outside the protection of the patent statutes. Accordingly, we will affirm the examiner's rejection of the claims as drawn to nonstatutory subject matter.
*3 Appellant invites our attention to the holding of the U.S. District Court for Delaware in Paine, Webber, Jackson and Curtis v. Merrill Lynch, 564 F.Supp. 1358, 218 USPQ 212 (D.Del.1983), wherein the "closest patent to Applicant's invention" was held patentable under 35 U.S.C. 101. However, in deciding the validity of the Musmanno patent under § 101, it is noteworthy that the district court had before it patent claims directed to a "system" for managing a cash account which combined three financial services offered by financial institutions and brokerage houses. The patent contained no "method" claims. Consequently, the court was not presented, as we are, with a "method of doing business." Whereas an apparatus or system capable of performing a business function may comprise patentable subject matter, a method of doing business generated by the apparatus or system is not. In re Johnston, 502 F.2d 765, 183 USPQ 172 (CCPA 1974), reversed on other grounds, Dann v. Johnston, 425 U.S. 219, 189 USPQ 257 (1976). Moreover, in examining the claims of the Musmanno patent, the court was "unable to find any direct or indirect recitation of a procedure for solving a mathematical problem", and accordingly held that "the claims do not recite or preempt an algorithm." Upon examining the present claims on appeal, we do not reach the same conclusion.
In Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 (1972), the Supreme Court defined "algorithm" as "[a] procedure for solving a given type of mathematical problem." This definition became the basis for the application of the two-part analysis for determining whether a claim reciting mathematics and/or computer programming is in compliance with 35 U.S.C. 101. In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978). The first part of the analysis requires a determination of whether the claim directly or indirectly recites an algorithm as defined in Benson. Here, insofar as the claimed method includes the steps of subtotaling (h) and totaling (i) a variety of entered and sorted debits on an account, it is clear that the claims define a procedure for solving a mathematical problem, or, an algorithm.
Having answered the threshold question in the affirmative, we proceed to the second part of the analysis which calls for a determination of whether the claimed method, as a whole, merely recites the algorithm such that it wholly preempts that algorithm. To be sure, the presently appealed claims require a number of steps preceding sub-totaling and totaling, i.e., entering, converting, sorting, correlating, storing, etc. However, such preliminary data gathering steps do not affect the "subject matter as a whole" determination. In re Richman, 563 F.2d 1026, 195 USPQ 340 (CCPA 1977). Similarly, the claimed concluding step (j), "printing and issuing said expense analysis statement to said user", amounts to no more than displaying the result of the calculations, albeit arguably in a particular format. In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA 1982). It is this type of concluding step that was described by the Supreme Court as "insignificant post solution activity [that] will not transform an unpatentable principle into a patentable process." Diamond v. Diehr, 450 U.S. 175, 209 USPQ 1 (1981). Hence, inasmuch as we find that the appealed claims preempt an algorithm for calculating expenses in the Benson sense, and involve no more than gathering data, calculating and forwarding information to customers via printed matter, the claims are non-statutory under § 101. In re Miller, 418 F.2d 1392, 164 USPQ 46 (CCPA 1969); In re Russell, 48 F.2d 668, 9 USPQ 181 (CCPA 1931).
*4 Based on the foregoing, we find that appellant's claimed accounting method is not proper subject matter for patent protection under 35 U.S.C. 101 either because (1) it constitutes a method of doing business, and/or (2) it preempts an algorithm. Accordingly, the examiner's decision rejecting the claims on appeal is affirmed to the extent that it is under the mandate of § 101. However, the rejection under § 112 is reversed.
37 CFR 1.136(a) does not apply to the times for taking any subsequent action in connection with this appeal.
BOARD OF PATENT APPEALS AND INTERFERENCES
Ian A. Calvert
Norman G. Torchin
Jerry D. Craig
Harrison E. McCandlish
Henry W. Tarring, II
William F. Smith
Edward C. Kimlin
FN1. Cf. Tew, Method of Doing Business, 16 J.Pat.Off.Soc'y. 607 (1934).
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