EX 2017
`
`Reply Brief
`Attorney Ref: 24349.000
`Application Serial No. 09/818,400
`Art Unit: 3688
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Appellants: MacLean, et al.
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`Group Art Unit:
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`3688
`
`Serial No.:
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`09/818,400
`
`Examiner:
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`Daniel Lastra
`
`Filed:
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`March 27, 2001
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`Confirmation No.:
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`2793
`
`For:
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`APPARATUS AND METHOD OF FACILITATING THE EXCHANGE
`OF POINTS BETWEEN SELECTED ENTITIES
`
`Mail Stop Appeal Brief — Patents
`Commissioner of Patents
`
`P.O. Box 1450
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`Alexandria, VA 2233-1450
`
`Sir:
`
`REPLY BRIEF
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`This reply brief is submitted in reply to the Examiner’s Answer dated April 26, 2011.
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`The Commissioner is hereby authorized to charge any fees which may be required or
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`credit any overpayment to Account No. 03-3415.
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`I certify that this correspondence is being transmitted via the Patent Electronic Filing System (EFS)
`to the United States Patent and T ademark Office on: June 27, 2011
`Date of Deposit
`
`Mark Montague
`
`
`
`Signatur
`
`June 27, 2011
`Date of Signature
`
`The Commissioner is hereby authorized to charge any additional fees which may be
`required, or credit any overpayment to Account No. 03-3415.
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`page 1 of 15
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`24349/000/12501 l0.l
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`Loyalty 2036
`Delta, et al. V. Loyalty
`CBM2014—00096
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`

`
`Reply Brief
`Attorney Ref: 24349.000
`Application Serial No. 09/818,400
`Art Unit: 3688
`
`Reply to The Examiner’s “Response to Argument”
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`On pages 38 through 42 of the Examiner’s Answer, the Examiner sets out a discussion
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`that allegedly addresses the appellants’ arguments presented in the Appeal Brief. However, in
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`this section of the Examiner’s Answer, rather than specifically address appellants’ arguments, the
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`Examiner merely refers to certain teachings in the cited art in connection with various features
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`recited in the claims of the application here under appeal. In connection with such assertions, it is
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`respectfully submitted that the Examiner has misrepresented the teachings of the cited art.
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`The Postrel Patent
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`In the Postrel patent or system, users are able to “accumulate” their loyalty program point
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`balances into a common account, referred to by Postrel as the “reward exchange account”.
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`Postrel is unclear on the precise nature of the reward exchange account but it appears to be a
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`point based account which contains what one may call “Postrel Points” for lack of a better term.
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`In each case, loyalty points from the loyalty programs are converted into Postrel Points at some
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`exchange or conversion rate agreed to between the loyalty program and the Postrel system
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`operator. For example, 10 loyalty points in loyalty program A might be equivalent to 2 Postrel
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`Points. Likewise, 10 loyalty points in loyalty program B might be equivalent to 5 Postrel Points.
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`The Postrel Points can then be used for goods and services offered by merchants either by
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`redeeming them for value (i.e. cash consideration) or transferring them to the merchant into its
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`own Postrel Points account. However, the Postrel system does not disclose how a user could
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`exchange loyalty points in program A into loyalty points in program B, or loyalty points in
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`program C into program D, or loyalty points in program D into program A, and so on.
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`Page 2 of 15
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`24349/000/12501 l0.l
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`

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`Reply Brief
`Attorney Ref: 24349.000
`Application Serial No. 09/818,400
`Art Unit: 3688
`
`The Lee Patent
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`The Lee patent discloses a system and method for a user to exchange loyalty points in
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`program A into loyalty points in program B. In the Lee system, users trade their loyalty program
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`point balances between themselves at a valuation that they determine. Thus, user A may agree to
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`trade 10 loyalty points in program A to user B for 5 loyalty points in program B held by user B,
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`thereby setting an exchange rate of 2 loyalty points in program A for every 1 point in program B.
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`But, user C may agree to trade 15 loyalty points in program A to user D for 5 loyalty points in
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`program B, thereby setting an exchange rate of 3 to 1. In the Lee system, no trade occurs unless
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`and until two users are able to negotiate a transaction that is acceptable to both of them. The Lee
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`patent does not disclose how a user could exchange loyalty points in program A into loyalty
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`points in program B without having another user present to accept that trade.
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`Appellants’ Claimed Invention
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`Appellants’ invention is distinct from Postrel and Lee because, among other things, it
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`provides a solution that allows a user to exchange loyalty points in program A into loyalty points
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`in program B, or loyalty points in program C into program D, or loyalty points in program D into
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`program A, and so on. The Appellants’ claimed invention includes a withdrawal rate and a
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`deposit rate for each program (i.e., loyalty point program) that reflects the value of the loyalty
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`program’s loyalty points. By allowing for two separate rates for each program, an infinite
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`combination of exchanges is possible with Appellants’ system. Moreover, all of the currently
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`enabled exchanges are always available to users. There is no need for a user to wait for another
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`user that wants to exchange or trade their loyalty points. This is significant for users precisely
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`because they may desire an award offered by loyalty program B where they do not have a
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`sufficient balance of loyalty points in program B. Through Appellants’ system they are able to
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`Page 3 of 15
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`24349/000/12501 10.1
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`

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`Reply Brief
`Attorney Ref: 24349.000
`Application Serial No. 09/818,400
`Art Unit: 3688
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`exchange their balance from program A, C, D or X into program B and thus obtain the award
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`they desire. It is important to note that loyalty program B may offer awards that are only
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`available from program B and not from a third party merchant.
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`In view of the foregoing, it is respectfully submitted that the specific assertions set forth
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`in Appellants’ Appeal Brief sufficiently establish that neither Postrel nor Lee anticipates any of
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`the claims of the application under appeal. Accordingly, the Examiner’s rejections of the claims
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`should be reversed.
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`Respectfully submitted,
`
`
`
`. Mark Montague, Reg. No. 36,61
`
`Attorney for Appellants
`
`COWAN, LIEBOWITZ & LATMAN, P.C
`1133 Avenue of the Americas
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`New York, New York 10036-6799
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`(212) 790-9200
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`Page 4 of 15
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`24349/000/12501 l0.l
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`

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`REMARKS
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`24349.000
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`This Amendment is made in response to the Office Action dated September 05, 2007. A
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`Request for an Extension of Time is submitted herewith to permit the filing of this Amendment
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`in the third month.
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`The undersigned directs the Examiner’s attention to pages 55 to 61 of the Amendment of
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`May 25, 2007, which the undersigned believes to fully respond to the rejections based upon Lee.
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`1.
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`Description of Applicants’ Points Managing System
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`Applicants invention relates as shown in Figures 8-12 of the subject application to a
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`method of managing a points withdrawing loyalty program which comprises a plurality of
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`withdrawing points, and a points depositing loyalty program which comprises a plurality of
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`deposit points. The points withdrawing loyalty program independently sets a number of these
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`withdrawing points, While the points withdrawing loyalty program sets a points withdrawing
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`rate. Next, a user or a loyalty program sets a first number of the withdrawing points, before the
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`number of withdrawing points is multiplied times the points withdrawing rate to provide a Value
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`of the number of the withdrawing points in terms of their common currency. Next, the
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`depositing loyalty program or user independently sets a points deposit rate, which defines the
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`value of the one point of the deposit rate in terms of its common currency. Finally, the number
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`of withdrawing points is multiplied times the points deposit rate for the depositing loyalty
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`program to output the number of the points to be deposited in the point deposit loyalty program.
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`2.
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`Postrel Fails to Disclose Applicants’ System
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`Applicants respectfully traverse and request reconsideration of the rejection of claims 1-
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`4, 13-14 and 21-28 as being anticipated under 35 U.S.C. l02(e) by U.S. Patent No. 6,594,640 of
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`Page 5 of 15
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`24349/O00/821 171.2
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`21
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`24349.000
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`Postrel. The undersigned directs the Examiner’s attention to pages 17-55 of Applicants’
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`Amendment of May 25, 2007, which fully defeats the rejection based upon Postrel.
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`Applicants respectfully assert that Postrel fails to disclose significant parts of Applicants’
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`invention. First, Postrel fails to disclose at least two loyalty programs, much less for exchanging
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`loyalty points between these two programs. Further, Postrel does not disclose withdrawing and
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`deposit rates, which define the value of the points associated with each of the loyalty programs.
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`In particular, each rate defines the amount of a common currency of that rate. In an illustrative
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`example, the common currency takes the form of Canadian dollars or US dollars. In such an
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`illustrative embodiment, the value of the rate is expressed as %0.0lO for one cent per point or
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`$0.020 for two cents per point of the common currency for the one point. See Figure 9. The
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`advantage of such rates enables a program operator to set the withdrawing rate and the deposit
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`rates, whereby the price of the first and second points can be controlled by the corresponding
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`operator of the corresponding loyalty programs. In addition as defined in claim 32, the value of
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`the rates may be set so that both of the loyalty programs are guaranteed a profit. Further, the
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`claims 34 and 35 define the withdrawing liability rates and the depositing liability, whereby the
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`liability as occurs in their respective loyalty points programs are removed or added dependent
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`whether the number of points are being withdrawn (removed) or deposited (added).
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`3.
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`Examiner’s Response to Arguments Regarding Postrel
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`In the outstanding Office Action of September 05, 2008, the Examiner (beginning at page
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`24) provides his analysis as to why the claims of Applicants were not patentably distinct from
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`Postrel and Lee. In summary, the Examiner asserts, “that in Postrel, points are exchanged from
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`one reward entity to another at a conversion rate, where points are withdrawn from a first reward
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`entity and are transferred or deposited into another reward entity (i.e. partner or associated air
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`22
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`24349.000
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`Carrier) using an exchanged rate.” See page 5 lines 5-8. The Examiner’s statement errs in at
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`least two respects. First, Postrel does not comprise first and second point issuers. Second more
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`particularly, Postrel does not teach the conversion rates that transfer points between the first and
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`second points issuers or loyalty programs, much less the details of these rates.
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`Postrel discloses only the following three rates: 1) the “exchange rate” (col. 3, lines 33-
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`39); 2) “limited conversion rate” (col. 8, lines 17-26),” and 3) “conversion rate,” (col. 9, lines 5-
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`14). Applicants respectfully assert that Postrel fails to show that none of these rates as set out in
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`Postrel are related to Applicants’ interchange of Applicants’ points issuers. In the above quote,
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`the Examiner asserts that a “conversion rate” is used. In Postrel, the “conversion rate” is defined
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`as follows:
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`The processor of the reward server may perform actions that may allow or refuse
`the requested action. In another embodiment, the trading server processor may be
`granted direct authorization to modify the user’s records in the reward server database
`without analysis by the processor of the reward server. A conversion rate may be applied
`to the transaction such that the reward server reduces the available rewards in the user’s
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`account. The reward server then transfers consideration to the trading server that
`corresponds to the value reduced in the reward system.
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`A comparison of Postrel’s description of the “conversion rate” and the Applicants’ system differs
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`significantly. As described above, the first points issuer set independently the value of a points
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`withdrawal rate in terms of the value in terms of the common currency. The points withdrawal
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`rate is used as shown in Figure 9 and 10 to determine the value of a number of first point and
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`then multiply that value of the number of withdrawal points times the points withdrawal rate to
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`determine the value of common currency is available to purchase a number of the deposit points.
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`The undersigned respectfully asserts that the points withdrawal rate is significantly different
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`from the conversion rate as defined above. Applicants’ withdrawal points are patentably
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`different from Postrel’s conversion rates.
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`24349/000/8211712
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`23
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`24349.000
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`The Examiner also uses the term, “exchange rate,” in the above quote. In Postrel,
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`“exchange rate,” is defined as the following:
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`An exchange rate will be established for the relative consideration received by the
`companies involved in the transaction. A user should be able to pool the various earned
`rewards that may exist in currently separate server systems where the resulting combined
`value may be used by a user of the system to acquire items of equivalent value.
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`A comparison of Postrel’s description of the term, “exchange rate,” and the Applicants’ “deposit
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`points rate” is also patentably distinct from Postrel’s “exchange rate” as defined above.
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`The undersigned respectfully questions the relevance of the follow Examiner’s statement:
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`“Postrel allows point issuers who originally sold reward point in their program for use an
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`incentive by third parties to repurchase points at a substantial discount, thereby reducing their
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`liability and allowing for a trading strategy that enables point to continually be sold and
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`repurchased. Therefore, when in Postrel a user makes a redemption request to a reward server
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`for available points or value, said reward server repurchased said points at a discount or
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`withdrawal rate, where the value obtained from said repurchased is used to buy points from
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`another point issuers at a conversion rate (i.e. deposit).”
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`The Examiner further asserts that a third party repurchases reward points thereby
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`enabling a reward server 10, 12 or 14 which in turn is used to buy points from another point
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`issuer at a conversion rate. First, the undersigned asserts that the redemption of previously
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`repurchased points of Postrel does not infer that the repurchased points are input at a rate, much
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`less than that at a conversion rate or at a deposit rate. The deposit rate as described in the above
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`quote does not disclosed how the repurchased point would be introduced into a reward server 10,
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`12 or 14. Further, Postrel does not disclose Applicants’ withdrawal rate and, in particular, the
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`step of converting first points into the second points by use of the points depositing rate.
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`24349/000/821 171.2
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`24
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`24349.000
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`Finally, Applicants respectfully traverses the Examiners following statement as set out in
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`the Office Action dated September 5, 2007 at page 24, lines 16-20, “Postrel teaches a withdrawal
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`and a deposit rate as Postrel withdraws point from a first point issuer at a withdrawal rate (i.e.
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`point issuer buys the points at discounted rate) and uses conversion rate to transform said point
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`from said first pint issuer to points that would be accepted (i.e, deposited) by another points
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`issuer at a deposit rate.” Applicants have shown above the steps of their withdrawal rate and
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`have demonstrated that their withdrawal rate is significantly from the rates of Postrel. Further,
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`Postrel does not disclose Applicants’ points deposit rate, much less this rates functionality of
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`converting the common currency into the corresponding number of second points. Further, this
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`passage further mentions conversion rates a number of times and indicates that the Examiner
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`believes that the conversion rate and the deposit rate are substantially similar. Applicants’
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`respectfully asserts that Postrel does not disclose either Applicants’ points deposit rates or their
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`withdrawal rates; as shown above, Postrel does not disclose Applicant’s conversion rate.
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`The Examiner asserts in the September 5, 2007 Office Action at page 25, lines 3-8, “that
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`Postrel teaches allowing issuers of reward points to take point off the book and eliminate them, if
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`desired at a discount rate, an exchange rate will be established for the relative consideration
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`received by the companies involved in the transaction and the reward server may refuse a
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`redemption request. Therefore, in Postrel the points issuers indicate the consideration of the
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`exchange rate that would accepted to perform a conversion from one point value to another.”
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`The above passage does not involve the transfer of points from a first point issuer to a second
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`point issuer. Rather, this passage deals with a system as shown in Fig. 4 of Postrel, where users
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`submit award points or credits into various types of transactions resulting from the various
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`reward servers 10, 12 and 14 for redemption of the points into a common pool from a trading
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`24349/000/821 171.2
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`25
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`24349.000
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`server 20, whereby an exchange rate will be established. Even though Postrel provides an
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`exchange rate to implement to the pooling of points, that polling is carried out only in Postrel’s
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`trading server 20 and not in his reward servers 10, 24 and 14. Though Postrel mentions, as
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`indicated above, the exchange rate and that this rate is involved with one of the reward servers
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`l0, l2 and 14, Postrel fails to disclose that Postrel’s exchange rate is associated with another
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`reward server, much less as to the details of such a relationship.
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`The Applicants continue in the September 05, 2007 Office Action at page 25, lines 1 1-16,
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`to assert that the Examiner asserts that, “Postrel teaches two exchange rate (sic), the rate when
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`points are withdrawn from a points issuer and the rate when said withdrawn points are used (i.e.
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`deposited) into another point issuer (i.e. associate airline) in order to buy products from said
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`associated airlines with said points (see col 1 1, lines 60-67) and where said withdrawal and
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`deposit is done at a conversion rate. Therefore, contrary to Applicant’s argument, Postrel
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`teaches two different rates.” In this instance, the Examiner is not relying not on the teachings of
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`Postrel to teach the use of his points withdrawal rate and his points deposit rate, but rather is
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`using the Applicants’ own teaching. The undersigned respectfully asserts that reliance on the
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`Applicants’ own teaching in Sections 102 and 102 of this application is clearly improper.
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`4.
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`Examiner’s Response to Arguments Regarding Lee are Rebutted!
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`The undersigned has found that the rejection based upon Lee as set out in the Office
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`Action of December 01, 2006 is literally identical to that found in the Office Action of
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`September 05, 2007. The undersigned directs the Examiner’s attention to pages 55 to 61 of the
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`Amendment of May 25, 2007, which the undersigned believes to fully respond to the rejection
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`based upon Lee.
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`24349/000/821 171.2
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`26
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`Applicants respectfully traverse and request reconsideration of the rejection of claims 1-
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`4, 13, 14, and 21-28 as being anticipated under 35 USC Section 102 over US Patent Publication
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`No. 2001/0054006 of Lee.
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`In the outstanding Office Action dated September 05, 2007, the Examiner states
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`beginning at page 26, line 20 et seq., that, “ contrary to applicant’s argument, Lee teaches at least
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`two point issuers, withdrawal and deposit rates and that the first points are exchanged from the
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`first point issued to the second point issuer.” Applicants respectfully traverse and request
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`reconsideration of the above quote. First, the undersigned asserts that the customer shops of Lee
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`do not function as point issuers, but rather only the points trading service 24 as shown in Figure
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`2 issues points that perform this function. By contrast, Applicants disclose first and second point
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`issuers, which are programmed to interchange points between the point issuers 900 and 901, as
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`shown in Figure 9. In particular, each point issuer of applicant independently sets the
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`withdrawing and depositing rates whereby the values of the points issued independently issued
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`from their respective issuers. On the other hand, the exchange rates (cash points) of Lee are
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`fixed for their respective shops for both selling and buying functions by only a single entity,
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`namely their points trading service 24. By contrast, Applicants seek to protect the method of the
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`first points issuer by: 1) setting a first number of its first points to be traded to the second points
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`issuer, 2) multiplying the number of the first points times the points withdrawal rate to provide a
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`value of the number of the first points, 3) multiplying the value of the first number of its points
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`times the deposit rate of the second points to provide the corresponding number of the second
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`points to be traded, and, then 4) exchanging the first number of the first points for the
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`corresponding second number of the second points of the second points issuer.
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`The Examiner asserts that Applicants continue to argue in the September 5, 2007 Office
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`Action at page 26, lines 3-4, “that l;e_e_ does not disclose the step ofenabling the customer to
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`enter the number ofthe first points to be sold, ” and at lines 3-20 that the Applicant argues that
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`lg does not disclose first and second points issuers, the withdrawal rate associated with the
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`first point issuers, or the deposit rate associated with the second point issuers and that Lg does
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`not teach that the first points are exchangedfrom the first point issuer to the second point issuer.
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`The Examiner answers that lg figures 4 and 5 teach an example when a customer sell 15,520
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`points ofB Oil company and 500 points ofB shopping club in order to buy 12, 777 points ofA
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`Airline. In said example, the withdrawal rate for B Oil Company is $. 71/point (i. e. $710,000
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`points) and the withdrawal rate for B shopping club is $.45/point (i.e. $45 0/1 000 points).
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`Therefore, selling 15,520 points ofB Oil Company would be converted to $11,019 (i. e. 15,520
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`points X $. 71/point) and selling 500 points ofB shopping club would be converted to $225 (i. e.
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`500points X$.45/point)for a total of$11,244 (i.e. $225 + $11,019). Using said $11,244 to buy
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`A airline points at a deposit rate of1.13 /$ (ie. 1-—— points /$880) would buy a total of12, 777
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`points (i.e. $11,244 x 1.13 points/$). Then adding the amount ofpreviously hold points in the
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`user account related to A Airline, which was 47,000 points (see figure 4) would result in a total
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`of59, 777 points (seefigure 5). Therefore, contrary to Applicant ’s argument, Lee teaches two
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`point issuers, withdrawal and deposit rates and that the first points are exchangedfiom the first
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`point issuer to the second point issuer. ”
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`On the other hand, Lee states at paragraphs 042 and 043 that, “For example, the
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`information providing unit 248 of the service providing server 24 sends a web document
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`including the result of processing the received request for trading of points. FIG. 5 illustrates an
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`example of a screen displaying a web document having the processed results of the point sales
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`request from a customer. Referring to FIG. 5, the screen shows: a guide sentence 502 saying
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`“The result of processing your point trading request is as below,” a space for showing a member
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`shop name 504, a space for showing holding points 506, and a space for remarks 508. In the
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`space for showing a member shop name 504, the names of member shops of which points the
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`customers has are shown, in the space for showing holding points 506, the holding points of the
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`member shops are shown, and in the space for remarks 508, the result of current state of
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`processing a points trade request is shown. According to the space for remarks, among the
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`points of A shoes, B airlines, B shopping club, and B oil company which the customer requested
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`to sell, the points of A shoes, A oil company and B Airlines are waiting for a trade, while the
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`points of B oil company and B shopping club have been sold. Therefore, by getting 225 cash
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`points as a result of selling 500 points of B shopping club, 11,019 cash points as a result of
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`selling 15,520 points of B oil company, the customer gets 11,244 cash points in total.
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`Accordingly, the points of B shopping club and B oil company are marked as 0 points.
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`Also, in the present embodiment, cash points obtained by the sales are used for
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`buying. For example, among the points of A airlines and A oil company the customer
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`requests to buy, the points of A airlines are bought. The buying exchange rate of A airlines
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`is 880 cash points per 1,000 points. When 11,244 cash points obtained through selling
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`holding points are all used to buy 12,777 points of A airlines, the current points of A
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`airlines becomes, as shown in FIG. 5, 59,777 points (the currently held 47,000 points+
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`additionally bought 12,777 points). Now the customer selects the confirmation button, and
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`then the screen disappears.”
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`The Examiner provides a disclosure of his shops for accumulating points by the purchase
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`of products as well as the use of his buy and sell rates. The entirety of the Examiner’s disclosure
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`is reproduced above in italics. A disclosure of Lee’s system and how it operates is reproduced
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`above in bold text. A comparison of the Examiner’s and Lee’s Disclosures clearly indicates that
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`the Lee Disclosure is rather skimpy as of the nature and operation of Lee’s system. The
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`undersigned’s review of Lee’s Disclosure indicates that Lee did not disclose any of his rates,
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`much less how they function. In particular, Lee mentions that holding points are sold to obtain
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`11,344 cash points, which in turn are used to buy 12,777 points of A airline. Then the current
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`points of A airline “becomes” 59,777 held points. Though Lee describes the “buying exchange
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`rate of A airlines is 880 cash point per 1,000Point,” Lee fails to describe how the A airline
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`exchange rate is use to collect the 59,777 points.
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`A comparison of the Examiner’s and Lee’s Disclosures show that Lee has failed to
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`disclose the nature of the buy and sell rates as well as the functionality of these rates to obtain a
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`desired number of points. By contrast, the Examiner’s Disclosure is more complete than Lee’s
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`Disclosure. It is respectfully asserted that the Examiner errs when he relies upon Applicants’
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`disclosure and not Lee’s disclosure to support his rejections.
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`Applicants’ system further distinguishes Lee and Postrel by permitting each of their
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`points issuers to independently set its points withdrawal rates to control the price at which this
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`points issuer can sell the points of its issuer. Similarly, Applicants can independently sets it
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`points deposit rate to control the price at which this point issuer can purchase the points of
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`another points issuer.
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`Still further, the use of Applicants’ withdrawal rate permits a points issuer to determine
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`the number of the points to be sold, to set a liability Withdrawal rate, to multiply the liability
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`withdrawing rate times the number of points to be removed from the books of the Withdrawing
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`loyalty program and to remove the amount of withdrawing liability in terms of the common
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`Page 14 of 15
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`24349/000/821 171.2
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`30
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`currency from the points issuer. Applicants respectfully assert that Lee’s system does not
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`include a plurality of point issuers and, therefore, is unable to remove or add points liability.
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`If the Examiner is unable to allow this application, he is requested to place a call to the
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`undersigned to suggest those Amendments whereby this application may be passed to issuance.
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`24349.000
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`Respectfully submitted,
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`COWAN, LIEBOWITZ & %TMAN, P.C.
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`Registration N . 22,479
`1133 Avenue of the Americas
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`New York, NY 10036-6799
`Telephone: (212) 790-9228
`Fax: (212) 575-0671
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`24349/000/821 171.2
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