Which Came First, The Chicken Or the Egg?: Federal Circuit Reminds Applicant That Order of Steps Matters
In the Federal Circuit decision In re Henry Gleizer, an applicant appealed a BPAI decision that had affirmed the examiner’s decision to reject all pending claims as being obvious. The appellant, Henry Gleizer, represented himself pro se.
The invention relates to systems and methods for electronically facilitated transactions. Claim 89 reads:
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.
On appeal one of the Appellant’s arguments was that even if the prior art disclosed every limitation in claim 89, the prior art failed to show the specific sequence of steps required by the claim.
This can be powerful argument for financial services patent applications when demonstrating to the PTO that claims are not rendered obvious; often times a financial services innovation may appear – at least facially – to be obvious when compared to prior art, and the differences may appear too subtle to convince an examiner of patentability, except for the particular order or sequence in which the claimed steps of the innovation are performed. In other words, sometimes the innovative features of financial services inventions are not appreciated by examiners until it is explained to them how certain steps of a process may or must be performed in a different order than is taught in the prior art.
This “temporal relationship” of steps may be achievable in a new electronic commerce method or other financial system/process due to a variety of reasons, such as processing or receiving certain data earlier or later (relative to other steps) than what occurred in the prior art. In this case, the Appellant argued that the electronic funds must be received from the buyer prior to shipping the purchased goods and that such sequence was not shown in the prior art. On its face, this may not seem like an overwhelming argument for non-obviousness, but in the overarching context of the invention it plays better when put into context.
Although such “order” arguments can have merit, unfortunately for the Appellant in this case, the Federal Circuit found that the requirement of receiving electronic funds prior to shipping the goods was disclosed only in the specification and is not an actual requirement of the 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. 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.
This of course does detract from the strength of non-obviousness based on the order claim steps are performed; it just means – as always – make sure the limitations that distinguish an invention over the prior art are in the claims.