Appeal No. 2006-2083
Reexamination Control No. 90/006,352
the system according to the prior art worked, it is inconceivable that one with ordinary skill in
the banking art, to whom potential payment risks arising from fractional banking would not have
been unknown, would not have known to prohibit fractional banking to eliminate payment risk.
In the background section of the patentee’s specification (column 2, lines 8-17), it is stated:
A particular problem is the payment risk now inherent in existing payment
mechanisms, and the problem of “float.” Payment risk arises in conventional
banking systems where a financial institution accepts deposits, then in turn loans
out that money to others. This is known as “fractional banking,” in that the
financial institution only keeps on hand a fraction of the actual assets it is holding
for the account of its depositors. If the financial institution fails due to bad loans
or fraud, the financial institution lacks sufficient assets to pay off its depositors.
As has been discussed above, the required motivation or suggestion to arrive at the claimed
invention need not be expressly stated in any cited prior art references. One with ordinary skill
in the art is presumed to be skilled. In re Sovish, 769 F.2d at 743, 226 USPQ at 774
(“[Applicant’s] argument presumes stupidity rather than skill”). A conclusion of obviousness
may be made from common knowledge and common sense of the person of ordinary skill in the
art without any specific hint or suggestion in a particular reference. In re Bozek, 416 F.2d 1385,
1390, 163 USPQ 545, 549 (CCPA 1969). Here, if the payment risk is known to have arisen
from fractional banking, it defies common sense and logic for one of ordinary skill in the art to
not have known that it can be eliminated by prohibiting fractional banking, such as by requiring
that the amount of digital cash outstanding be less than or equal to the amount of commodity on
reserve in secure storage. We find that at the time of the patentee’s invention, one with ordinary
skill in the art would have known to prohibit fractional banking to eliminate payment risk.
It is noted that even the unclaimed “custodial” nature of the patentee’s deposited
commodity would not have been unknown to one with ordinary skill in the art when it comes to
gold deposited at a bank. The federal reserve system has a gold vault in the Federal Reserve
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