Application of Johnston

• Decision Date: 19 September 1974
• Parties: Application of Thomas R. JOHNSTON. Patent Appeal No. 9088.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

502 F.2d 765

Application of Thomas R. JOHNSTON. Patent Appeal No. 9088.

United States Court of Customs and Patent Appeals,

September 19, 1974.

Morton C. Jacobs, Philadelphia, Pa., attorney of record, for appellant, McClure, Millman & Jacobs, Philadelphia, Pa., of counsel.

Joseph F. Nakamura, Washington, D. C., for the Commissioner of Patents, Jere W. Sears, Washington, D. C., of counsel.

Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.

BALDWIN, Judge.

This appeal is from the decision of the Patent Office Board of Appeals rejecting claims 20-24¹ of appellant's application.²

The Invention

Appellant's invention relates to an automatic financial record-keeping system which employs a digital computer. The application states:

Automatic data processing equipments employing digital computers have been developed for the handling of much of the record-keeping operations involved in a banking system.

The checks and deposit slips are automatically processed by forming those items as machine-readable records; that is, magnetic ink characters are imprinted on the check, so that magnetic readers are enabled to process these checks and enter the data in a computer system in the form of coded electrical signals. Other character-reading machines operating on an optical principle for automatically reading special optical type fonts are also employed. With such machine systems, most of the extensive data handling required in a bank can be performed automatically.

It has been found that such data processing equipment, with certain additions and modifications, can be employed to process automatically much, if not all, of the individual record keeping required by a bank's customers to maintain their own personal and business financial records. That is, as a supplement to the conventional, periodic bank statement furnished to a bank customer, a record summary is provided with sic makes unnecessary much or all of the tedious book-keeping and accounting that the customers would otherwise have to perform.

* * * * * *

In accordance with an embodiment of this invention, an automatic record-keeping system is provided which is especially adapted for use with automatic banking devices for machine handling of the transactions (i. e. checks or deposits) of demand-deposit accounts of bank customers. Machine-readable records of each bank transaction are generated directly on the check or the deposit ticket. The data of such records incorporate those required for conventional banking systems presently carried on checks (or deposit tickets); namely, the customer's account number, amount of the transaction, and the type of transaction (that is, whether a check or a deposit). Another set of data forming a machine-readable record is provided on each transaction, namely, a set of code characters that identify the book-keeping classification of each transaction; this classification code is called the "category number." e. g., categories indicating different sources of income for which deposits are made and categories indicating different types of expenses for which checks are written. The category number is entered by the customer on each transaction slip (check or deposit) at the time it is prepared, in the form of a machine-readable record by means of an appropriate device, or in the form of a set of hand-written numeric characters which are converted to a machine-readable record by the customer's bank.

In the customer's bank, upon a deposit being made or a check clearing the bank, the machine-readable transaction records on the imprinted checks or deposit tickets are read by a suitable document-reader device and stored in a transaction file. To process the transaction file, the automatic record-keeping system employs a data processor, such as a programmable electronic digital computer, having certain data storage files and a control system. In addition to the transaction file, a master record-keeping file is used to store all of the records required for each customer in accordance with the customer's own chart of accounts. The latter is individually designed to the customer's needs and also constructed to cooperate with the control system in the processing of the customer's transactions. The control system directs the generation of periodic output reports for the customer which present the customer's transaction records in accordance with his own chart of accounts and desired accounting procedures.

The control system is described as comprising a general control which is applicable to the processing operations that are common to most customers and a master control for the operations that vary on an individual basis with each customer. The general control, as allegedly reduced to practice, is in the form of a software program, and the master control is a series of sub-files, one for each customer, which are in the form of a sequence of records containing suitable control mechanisms and the customer's financial data.

The application contains schematic block and flow diagrams of the entire apparatus including detailed descriptions of each diagram which set forth the interrelationships between all the disclosed elements of the apparatus. The application also discloses a print-out of a complete program and a detailed flow chart thereof for use with a known commercial general-purpose computer, the IBM 1400 series, to provide the special-purpose computer which forms the apparatus of appellant's invention.

Claim 20 is exemplary:

20. A record-keeping machine system for financial accounts, said system comprising a data processor including a memory for storing combinatorially coded signal records;

a processor for combining and comparing the coded signals of said records;

input and output devices;

and a control system for supervising and directing said other parts of said data processor to perform a certain sequence of operations;

said memory including a storage file of a plurality of machine-readable records formed of coded combinatorial signals, a master section of said file including a plurality of predeterminedly sequenced sub-files of said records, each said sub-file including a different signal group record for a certain one of a plurality of account identifications, a plurality of predeterminedly sequenced different signal group records for different record-keeping category codes individually associated with reach of said account identification records, a plurality of different group records each for an amount total associated with a different one of said category records, and a plurality of totalizing operation records individually associated with certain pluralities of said category records and sequenced with the associated category records, a transaction section of said file including different pluralities of sub-files of said records, each of said transaction sub-files including one of said account identification signal group records, one of said associated category signal group records, and a separate transaction amount signal group record associated with each of said category records;

said control system including means for directing the processing of said files in accordance with the predetermined sequences of said master sub-files and of said category records of each sub-file, said processing directing means including means for locating in said master file section, for each of said transaction sub-files, that one of said category records corresponding to the transaction account identification record and the transaction category record and for augmenting the associated master amount total record by the amount records of the corresponding transaction sub-file; and

means for producing an output record for each of said master sub-files;

said output record producing means including means for identifying each of said master sub-file category records and for producing an output listing of the sub-file category codes and of the associated category amount total from said records, means for directing the accumulation of the amount totals of successive ones of said category records, and means for identifying each of said totalizing records and for producing an output record of said accumulation of totals of the preceding category records. paragraphing ours.

The Rejections

The examiner rejected all the claims in appellant's application under 35 U.S.C. § 112 and 35 U.S.C. § 102; however, the board did not consider the underlying bases for these rejections to be valid and did not sustain these rejections.³ However, under the provisions of Rule 196(b), Rules of Practice in Patent Cases,⁴ the board then entered five new rejections under the provisions of 35 U.S.C. § 112, 35 U.S.C. § 101, and 35 U.S.C. § 103.⁵

Rejections Under 35 U.S.C. § 112

The board's first rejection of the claims is under the provisions of the second paragraph of § 112 in that the claims fail to particularly point out and distinctly claim that which appellant considers to be his invention.

The board stated:

Appellant * * * in his specification acknowledges that automatic data processing equipment has already been developed for the financial record-keeping and statement-furnishing operations of a bank so that the rendering of these services merely by some form of automatic data processing, not including appellant's improvements thereover, was not considered to be appellant's invention.

Turning now to the appealed claims, both apparatus and method,⁶ we find them not directed to improved record keeping machinery, but rather to a broad system of keeping financial records where the distinction over acknowledged prior record-keeping is either in the identity of the person or institution which has custody of certain phases of the bookkeeping operation or in the financial meaning of, or the relationship existing between, the various records. Thus, the broad sweeping reference in the claims to the automation of the banking industry serves only as a dress

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