Kaslow, In re, 82-599

• Decision Date: 17 May 1983
• Docket Number: No. 82-599,82-599
• Citation: 217 USPQ 1089,707 F.2d 1366
• Parties: In re Walter KASLOW and Uniform Product Code Council, Inc. (UPPC), Intervenor. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 1366

707 F.2d 1366

217 U.S.P.Q. 1089

In re Walter KASLOW and Uniform Product Code Council, Inc. (UPPC), Intervenor.

Appeal No. 82-599.

United States Court of Appeals Federal Circuit.

May 17, 1983.

Michael Ebert, New York City, argued for appellant.

Thomas E. Lynch, Arlington, Va., argued for U.S. Patent and Trademark Office. With him on the brief were Joseph F. Nakamura, Sol. and Jere W. Sears, Deputy Sol., Washington, D.C.

Darryl Mexic, Washington, D.C., argued for intervenor. With him on the brief was Robert G. McMorrow, Washington, D.C.

Before BALDWIN, Circuit Judge, SKELTON, Senior Circuit Judge, and KASHIWA, Circuit Judge.

KASHIWA, Circuit Judge.

This is an appeal from the decision of the Patent and Trademark Office Board of Appeals (the "Board") sustaining the examiner's rejection of claims 1-4 and 6 in application Serial No. 684,408, filed May 7, 1976, entitled "Coded Merchandising Coupon." This application is a division of appellant's application, filed December 13, 1974, which issued as U.S. Patent No. 3,959,624 on May 25, 1976. The claims were primarily rejected as obvious under 35 U.S.C. Sec. 103 ¹ in view of public use evidence in combination with a prior art reference. The claims were also rejected as being drawn to new matter under 35 U.S.C. Sec. 132, ² although this rejection was treated as if it had been made under the first paragraph of 35 U.S.C. Sec. 112. ³ We affirm.

I

Appellant's invention relates to a method and system for redeeming discount coupons automatically at a retail store's checkout counter. The coupons are used to reduce the purchasing price of consumer items commonly found in retail stores such as supermarkets. The system disclosed employs an existing optical scanner and computer system, the IBM Supermarket System. The discount coupon disclosed is impressed with a Universal Product Code (the "UPC") symbol and a recognition code symbol.

The UPC symbol is a series of light and dark parallel bars which represent 10 digits. The bars are grouped into two groups, generally referred to as "5-by-5," with each group representing five digits. One group of five identifies the manufacturer of consumer items; and the other group identifies a particular consumer item. The "5-by-5" bar code symbol is best illustrated as follows: ⁴

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The recognition code symbol, also in the UPC bar code format, identifies the item the symbol is impressed on as the discount coupon. In addition, the symbol identifies the amount of the discount.

Appellant's invention is best described by his independent claims:

1. The method of redeeming merchandise coupons issued by various manufacturers which promise specified discounts on certain consumer items produced by these manufacturers and sold in supermarkets, each item bearing a distinctive symbol based on the universal product code in which five digits identify the manufacturer thereof and another five digits identify the specific item, said method comprising the steps of:

A impressing on each coupon a universal product code symbol which corresponds to the symbol appearing on the merchandise item to which it is related and a recognition code symbol representing the coupon;

B storing in a memory at each supermarket carrying said certain consumer items, redemption signals representing the product code symbols borne by the consumer items which are subject to said discounts;

C optically scanning the product code and recognition symbols borne by the coupons offered for redemption at each of said supermarkets to produce coupon signals and recognition signals;

D comparing each coupon signal derived from a coupon with the stored redemption signals in the memory to determine whether a match exists between the coupon signal and one of said stored redemption signals and thereby avoid misredemption of the coupon, the comparison being rendered effective only if the coupon signal is accompanied by a recognition signal;

E summarizing the coupons redeemed during a predetermined period at each of said supermarkets to provide data relating to the various manufacturers identified in the redeemed coupons and to the number of redeemed coupons assigned to each of these manufacturers; and

F transmitting the summarized data obtained at each supermarket to a central computer linked to said supermarkets to provide an audit of the overall volume of coupon traffic at these supermarkets and * * *

the relative trading-in of coupons issued by the various manufacturers.

* * *

3. In a system for redeeming merchandising coupons issued by various manufacturers to provide discounts on certain consumer items produced by these manufacturers which are sold in supermarkets, each coupon having a universal product symbol printed thereon in which five digits identify the manufacturer of a consumer item and another five digits identify the item and grants a specified discount with respect to a consumer item which bears the same symbol, each coupon also having a recognition code symbol printed thereon representing the coupon, the combination comprising:

A an optical scanning unit at each of said supermarkets carrying said certain items to scan the symbols on each of said coupons to produce a coupon signal and a recognition signal representative thereof;

B a terminal at each of said supermarkets including a memory which stores redemption signals representing the consumer items subject to discount by said coupons, means activated by the recognition signal to compare the coupon signal produced by each scanned coupon with each of the stored redemption signals to determine whether a match exists between the coupon signal and one of the stored redemption signals and to indicate the existence of a match authorizing a coupon redemption, and means to summarize the coupons redeemed during a predetermined period to provide data relating to the various manufacturers identified in the redeemed coupons and to the number of redeemed coupons assigned to each of these manufacturers; and

C means to transmit the summarized data obtained at each supermarket to a central computer linked to said supermarkets to provide an audit of the overall volume of coupon traffic at these supermarkets and the relative trading-in of coupons issued by the various manufacturers.

II

The Uniform Product Code Council, Inc. ⁵ (the "UPCC"), the intervenor in the present appeal, adopted a 10-digit UPC code in 1970. ⁶ As part of its process of selecting a UPC symbol, the intervenor published a booklet in May, 1973, the UPC Symbol Specification. In that booklet an exemplary bar code symbol, the symbol shown previously, was fully illustrated and described. Subsequently, this well-known bar code symbol was formally adopted by the intervenor for use on products in April, 1974. The intervenor, however, did not adopt the use of this UPC symbol on coupons as of the effective filing date of appellant's application, December 13, 1974.

Participating in the UPC symbol selection process, RCA in 1972 submitted a brochure which showed its proposed UPC symbol, the RCA Bullseye symbol. The Bullseye symbol is best illustrated as follows:

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The RCA brochure stated that the use of its symbol was for both products and coupons.

Moreover, RCA also disclosed its version of the bar code symbol in the brochure. ⁷

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To demonstrate the feasibility of its coupon redemption system, RCA, in conjunction with the Kroger supermarket chain and Proctor & Gamble, successfully operated such a system in early 1973 at a Kroger supermarket in Kenwood (Cincinnati), Ohio. The discount coupons used, issued by Proctor & Gamble for four of its products, ⁸ were marked with the RCA Bullseye symbol. The RCA symbol used a 1-7-2 code--the first digit indicated whether the item is a product or coupon and the next seven digits identified the particular product. ⁹ For example, a "0" in the first digit indicated that the scanned item is a product; and a nonzero indicated that the scanned item is a coupon. In addition, each nonzero numeral also represented a specific amount of the discount, e.g., "1" could represent a 5cents discount, "2" a 10cents discount, and "3" a 25cents discount.

The RCA computer system included five or six checkout stands connected to a central computer, all of which were located in one supermarket. Each checkout stand included an optical scanner, a display, a keyboard, a printer, and a cash register terminal having a "string" memory and a comparator. In operation, products were optically scanned first and the Bullseye symbol on each item caused the name of the item and the price of that item to be retrieved from the computer memory and shown on the display and stored in the "string" memory. Next, a coupon was optically scanned and the first digit of that Bullseye symbol would trigger a comparator that compares the 7-digit product identification symbol on the coupon with a list of product identification numbers held in the "string" memory. If a match was made, then the amount of the discount was retrieved from the computer memory and shown on the display and registered by the terminal. If a match was not found by the comparator, then the coupon was dishonored and this occurrence entered in the terminal. There were daily and weekly summaries made and sent to the single manufacturer, Proctor & Gamble. The summary for each coupon item, generated by the computer, included redemptions and attempted misredemptions, misredemption being a crediting of a discount to a customer who did not purchase the product to which the discount applied.

A similar prior art system is IBM's 3660 Supermarket System a brochure for which is incorporated by reference into appellant's application. Each checkout stand of this system includes an optical scanner and a terminal. The...