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More Patents Bite the Dust Thanks to CAFC Bilski Decision


Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course
Posted: December 15, 2009 @ 11:11 am

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On Friday, December 11, 2009, two more patents bit the dust thanks to the ruling of the United States Federal District Court for the Northern District of California.  This case came to my attention through Docket Report, which provides a remarkably detailed and informative daily summary of patent litigation events.  In the matter of Fuzzysharp Technologies, Inc. v. 3D Labs, Inc., LTD (Case No: C 07-5948 SBA) District Judge Saundra Brown Armstrong granted Summary Judgment for the defendant and ruled that the relevant claims of U.S. Patent No. 6,172,679 and U.S. Patent No. 6,618,047 were invalid for failure to satisfy the machine or transformation test set forth by the United States Court of Appeals for the Federal Circuit in Bilski.  It seems inevitable that the Supreme Court will alter in at least some way the Bilski test, which Justice Sotomayor continually referred to as “extreme” during oral arguments and which also troubled Justice Breyer and others.  In the meantime, because the Patent Office and District Courts continue to churn these cases, a lot of work will be wasted and money needlessly expended only to have to start all over with a new test.  Talk about ridiculous!

The claims in question (claims 1 and 12 of the ‘047 patent; and claims 1, 4 and 5 of the ‘679 patent) and the patents in general seem to be fairly typical representations of patents issued in the post State Street era, although the lineage of these patents date back to well before State Street was decided in 1998, although neither were granted until after State Street was decided.  Nonetheless, these and many other patents granted in the post State Street era are now in question and falling, not because the underlying technology is not patentable, but because the way it is described satisfies a test different from the one we live with currently.  Essentially, the Federal Circuit decided in Bilski that they didn’t like the previous test and didn’t care that many individuals and companies ordered their affairs according to State Street.  By changing the rules the Federal Circuit showed enormous indifference to the need for settled law, and now daily the decision punishes those who played by the existing rules because they could not foresee the reconfiguration of settled law that occurred in Bilski.  This is fundamentally unfair, make no mistake about it, and I wish more had been made about this at the Supreme Court.

In reading the Background section of the opinion the ruling should not come as a surprise. Judge Armstrong explained the patents, summarizing them by saying:

The claims in both patents are ‘method’ or ‘process’ claims drawn to mathematical algorithms that can be used to reduce the number of calculations required to determine whether a 3D surface is visible or invisible on a display screen. According to Fuzzysharp, reducing the number of calculations decreases the processing time necessary to form a digital image, thereby enhancing the speed with which the image can be displayed.

Oddly, the cite given in the decision is to the Plaintiff’s opposition papers. Perhaps the cite is incorrect, or perhaps this statement was taken out of context, I just don’t know. But characterizing method claims as being drawn to mathematical algorithms is probably not the best thing to do in order to support patentability.

After going through the Federal Circuit’s machine or transformation test and a summary of the arguments made by the parties, the district court observed that the salient question is not whether the claims are tied to a computer, but rather whether the claims in question are “tied to a particular machine,” as was explicitly stated in the Bilski decision.  The district court then went through a series of cases where other district court Judges ruled similarly, and also went through a series of decisions from the Board of Patent Appeals and Interferences that also reached similar conclusions, namely that recitation of a computer, standing alone, is not enough to overcome a Bilski rejection.

Judge Armstrong, prior to reaching her ultimate conclusion, explained:

The claim language clearly states that these claims are drawn to mathematical calculations and algorithms for calculating whether certain surfaces are visible or invisible in 3D computer graphics. This is exemplified by the language of the claims, which specify a sequence of calculations that involve “identifying,” “comparing,” “determining,” and “ignoring” data. Though the calculations may be “performed on a computer,” they are not tied to any particular computer. For these reasons, the claims of the ‘047 and ‘679 Patent fail to pass muster under the Bilski machine implementation test for patentability under 35 U.S.C. § 101.

So the fact that a method or process may be performed on a computer is not enough. I dare say that strict adherence to the Federal Circuit test in Bilski would compel a similar ruling that a method or process is not patentable even if it must be performed on a computer. Thus, the take home lesson moving forward must be that it is not enough to recite a computer, or even articulate an invention that necessarily must and only can be performed on a computer. At least for now these types of inventions must be described with a level of particularity that explains the innovation on a system level. The reality is that for the moment we cannot articulate these types of inventions as software. Yes, they are software and that reality does not and will not change. Regardless of the outcome of the Bilski case at the Supreme Court software will continue to be patentable in the United States, we just now cannot call it software and may in the future be unable to do so as well depending on the ruling issued by the Supreme Court. Whether we call it software or not, it directs a computer, which is a machine, to undertake action in a predetermined way. So the focus needs to be on the pieces, parts and overall architecture and not the method steps.

One final thought on this case. The defendant, not surprisingly, argued that the claims in the patents in question were nothing more than “mathematical formulas and algorithms that fail Bilski’s machine-or-transformation test.” Surprisingly, the plaintiff conceded that claims in question were are not transformative, but nevertheless were tied to a particular machine; namely, a computer. The “tied to a computer” argument with patent applications written and issued when State Street was the law of the land are generally speaking going to have a very difficult time satisfying the machine part of the Bilski test. Yes, it is conceivable, but the weight of authority at the district court level and from the Board of Patent Appeals within the US Patent Office is telling a different story. Yes, patent examiners do frequently allow you to get claims with little more than a computer being recited, and you should take them because they may well stand the test of time after the Supreme Court issues its Bilski decision.

Having said all of this, it is becoming increasingly clear that at least some effort, and more than token effort, needs to be placed on demonstrating patent claims are transformative. In this particular case, where the invention relates to a method of reducing the visibility related computations in 3-D computer graphics, I think a transformation argument could have been mounted, or at least could have been attempted. I know there are a lot of decisions that go into which arguments are made and how, and I don’t want to engage in Monday (or Tuesday) morning Quarterbacking, but I do think it is important for us all, perhaps particularly clients, to understand that the machine test when strictly followed is disaster waiting to happen for many, if not most, pre-Bilski software related patents.

Now, one final thought on software patents in general. The Supreme Court is going to at a minimum adjust the Bilski test. We all know that for fact. There is no reason for the Supreme Court to take a case from the Federal Circuit for the purpose of saying “nice job, you got it right.” It has now been many years since the Supreme Court has affirmed the Federal Circuit, and Bilski will not reverse that trend. The only responsible thing for the Patent Office to do is to give applicants the option to suspend prosecution pending a decision. For those who wrote and filed applications before Bilski that would likely be welcomed, otherwise rejections will be finally made and the game of stringing out prosecution will begin, waiting for the Supreme Court to fix this mess. It would also be wise for district courts to stand down for a few months as well, otherwise they will waste time and resources now and eventually get the case kicked back to them for consideration in light of a newly minted Supreme Court decision.

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Posted in: Bilski, Gene Quinn, IP News, IPWatchdog.com Articles, Patent Litigation, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

20 comments
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  1. If indeed as you say, the decision was based on the “particular machine” prong of Bilski (I don’t have access to the DC decision) then it is a true travesty on justice for several reasons. First it is ex post facto application of a supposed law that did not exist before hand and probably won’t exist after the SCt. revises Bilski. Second, the “tied to a particular machine” prong of Bilski is pure dicta (not law) because that prong was never adjudicated in Bilski. The bottom line is that judges and “justices” are out to do vigilante style “justice” by killing patents wherever they can rather than letting Congress pass a law that abolishes patents. The black and white words of the still in effect statute (35 USC 101) say “any” new and useful process.

  2. This would have never happened if State Street had been decided correctly in the first place.

  3. With all of that said, this would have never happened even before the first place if the planet Earth had “correctly” formed without a molten iron core. ;-)

  4. Gene,

    The decision by the district court here is bizarre, and is why the Bilski “machine or transformation” test must go. I’ve reviewed Claim 1 for each of these patents. Each of these Claims describe a method which achieves a “real world” result, namely reducing the visibility related computations in 3-D computer graphics. Why that isn’t treated as “patent-eligible” subject matter under 35 USC 101 is beyond me.

    In addition, this nonsense about “algorithms” has got to go too. The absurdity of Gottshalk v Benson and Parker v Flook about focusing on whether or not the claimed invention contains an “algorithm” is creating unnecessary havoc. Instead of focusing on whether the claimed method/device uses an “algorithm,” let’s determine whether the claimed method/device achieves a “real world” result, be by an by or without an “algorithm.”

  5. Alan,

    With all due respect, I completely disagree with your suggestion that State Street was decided incorrectly regarding the 35 USC 101 issue with regard to the particular claimed invention. Here’s the nugget holding from State Street: “we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces “a useful, concrete and tangible result”-a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.” In other words, the State Street held that claimed invention provided “real world” result by transforming the data into something that could be used, i.e., “a final share price momentarily fixed.” Instead, and as I’ve said repeatedly, let’s judge these so-called “business methods” on the merits under 35 USC 112, 102, and 103 which can be done objectively, and not for “patent eligibility” under 35 USC 101 which continues to be applied subjectively, including the nonsensical Bilski “machine or transformation” test.

  6. Gene, it is a truly sad day not just for patents but for innovation and the economic future of our country. The fact that “the plaintiff conceded that claims in question were are not transformative” is truly bizarre. At the most basic level, their invention involves the transformation of electrical energy into light. The invention consumes energy, opens and closes switches, changes the elecrical charge of memory circuits, etc. Clearly this is a machine that has transformed electrical energy into a useful image, much like a laser diode.

  7. Great post. You sparked an interesting question. You said, “The reality is that for the moment we cannot articulate these types of inventions as software.” It seems to me like the term is such an everyday usage term, but yet it is either claimed as a method, a Beauregard claim, or tried as a signal, but I’m wondering has software ever been claimed as software in the preamble? I’m guessing, not successfully, but didn’t know.

  8. Dale-

    I agree completely. I don’t get not at least arguing transformation, because there looks to be plenty here. I think the way to tackle these issues is through head long assault on the transformation prong. We know what will happen with the machine prong. With setting up appropriate evidence of experts transformation should be able to be demonstrated, or at least in some cases turn the tide.

    -Gene

  9. Trent-

    You would be hard pressed to find mention of software in any patent claims. What I meant by the quote was we have to pretend that the invention is not software, but is a machine or some kind of process that has a transformative result/outcome. The reality is that we are describing what the rest of the world would call software, but we cannot let on that is what it is. Exalting form over substance seems crazy to me, but that is what is happening in front of our eyes, and to the detriment of those who ordered their affairs relying on what once upon a time was settled law.

    -Gene

  10. Social comments and analytics for this post…

    This post was mentioned on Twitter by ipwatchdog: More Patents Bite the Dust Thanks to CAFC Bilski Decision – 2 Fuzzysharp patents do not satisfy machine/transformation. http://bit.ly/67jG4d

  11. Perhaps some patent owners should consider filing narrowing reissues to add limitations putting at least some claims into a condition more likely to survive Bilski, in spite of the “intervening rights” losses? [After the Sup. Ct. decision, of course]

  12. “The reality is that we are describing what the rest of the world would call software, but we cannot let on that is what it is.”

    The reality is that what the rest of the world believes to be “software’ and how the USPTO treats software are two totally different things.

    Examiner’s pretend that any claim related to “software” describes software, per se (i.e., software disembodied from anything else). However, nobody goes to Best Buy to purchase the latest disembodied abstract idea. They go to Best Buy to purchase a computer readable medium and/or a license to practice a certain method on their computer.

    To the real world, “software” is real. You can buy it, you can sell it, it transforms your computer into a computer capable of doing things your computer would not otherwise be capable of performing. However, the USPTO thinks software is an abstract idea.

    These Courts inalidating these patents knowing full well that the Supreme Court is going to rule on this issue is a travesty.

  13. Excellent points Just Visiting

  14. DBH,

    I don’t know exactly how many years it is since the “first” reprogrammble electronic computer was publicly used. Clearly it’s about 40 years since personal computers were introduced (say circa 1970).

    Despite that, I submit that people still do not full comprehend what “software” is is or what “computers” are. We are still all blind men circling the elephant.

    But let’s forget the computer/software conundrum for a moment and let’s “step back” to looking at chemical reactions.

    Even the sage and wise judges on the US Supreme Court grasp (grok, etc.) to the limited sense that they can, that some sort of “physical transformation” occurs when a reaction occurs like in the case of say, Na + Cl –> NaCl. (In other words, Sodium combined with Calcium yields Salt; for those who don’t read chemical symbols.)

    But what exactly has been “transformed”? We are savvy enough in this “modern” day and age to understand that the nucleus of the Sodium atom has not changed. It has the same number of protons and neutrons that it had before the reaction. Ditto for the Calcium atom.

    In fact, ditto for most of the electron orbitals of both atoms save for the outer most or valence band orbitals. Stated another way, the “physical structure” of these atoms are substantially unchanged. The only thing that changed was this nebulous cloud of electronic charge that surrounds the atoms before and after they “combined” by means of a “chemical” reaction.

    But of course most sage and wise judges on the CAFC and the SCt. know in their heart of hearts that electron clouds are intangible and fleeting things that cannot be given patentable weight. Consider for example In re Nuitjen. Therefore, according to them, nothing has changed in the chemical reaction. An intangible and fleeting electron cloud (fleeting according to Heisenberg) merely got slightly re-distributed.

    Now let us “step forward” again into the world of computers. Let’s assume a computer made of CMOS logic circuits. What changes between the before and the after that the CMOs circuits of the computer get “programmed”? Well nothing save for some nebulous electron clouds that get redistributed among the gates of the transistors in the CMOS circuits.

    So as you see, computers and programming have absolutely no comparative relation to chemical reactions. Two entirely different things. One has nothing to do with the other. /sarcasm

  15. Step back,

    Why stop there the ancient Greeks knew about the six simple machines and all mechanical devices are combinations of these simple machines. Some mechanical inventions also use electron clouds moving around (chemistry), but you have already shown there is nothing novel about wiggling electron clouds. So we have eliminated all mechanical and chemical inventions from the realm of patents. But since all of electronics and electricity is just wiggling these same electron clouds, these clearly do not deserve Monopoly status. Lasers also just wiggle around electrons and put out light and light is clearly well known. Nuclear processes are just wiggling positive charges clouds instead of negative charge clouds, so this is certainly not deserving of the embarrassment of Monopoly. Einstein showed that matter could be converted into energy and vice versa, so there is nothing new about PET scanners. In case we have not yet shown that there is really no reason for a patent system. The Supremes in KSR have shown that any invention that obeys the laws of physics should not be patentable, specifically they state “a patent for a combination which only unites old elements with no change in their respective functions . . . obviously withdraws what is already known in to the field of its monopoly.” Only God can obtain a patent and only if he/she/it does not obey the laws of physics.

  16. To rephrase a Supreme Court decision (Simpson, US 1964), the patent must disclose the invention in a way that the public can make and use the invention in a way the public can tangibly see the invention’s usefulness. The claim at issue in State Street satisfied this requirement by recording the result of the calculations as value tied to a financial account (something the public could see and appreciate). The claims at issue in Patents No. 6,172,679 and 6,618,047 failed this test for failing to state that after the calculations, the method would then contribute to “generate images of surfaces directly visible to a viewer” US Patent 6172679, Col. 1, ll 19-20. This type of publicly tangible result is, in my opinion, what the CAFC wanted to see in Bilski and meant by the machine or transformation test.
    I do NOT state or imply that the patents do not adequately proclaim that this is the intended result of the invention. The ‘047 patent even includes pseudocode (see col. 12) to demonstrate this result.
    It is my wish that the CAFC return to the days of the reading the WRITTEN DESCRIPTION and drop this ridiculous evolving written description doctrine.

  17. The lying eyes of the lay public have never been part of the test for patentability.

    There are many chemical reactions where you start with two clear liquids and the product is a clear liquid. As far as the lay public can tell simply by looking, nothing has been “transformed”. Nothing has changed.

    As Richard Pryor used to say: “Who ya gonna believe; me or your lying eyes?”

  18. It all comes down to definitions. Take the word “obvious”. How do you define it? How do you define software? How do you define “particular machine” Or “technical effect”

    The devil is very much in the details, and the details are not going to be solved by the Supreme Court, at least not in this case. Thankfully Canadian Patent Law is a bit more sane. The American system looks like it was designed by the famed inventor Rube Goldberg.

  19. Snide comments aside, there are two drivers of the oscillation of patentability. The first driver is the rapid evolution of technology. The more growth in a region’s technology, the more patents. While this is an ‘obvious’ relationship, it is important in that this direct relationship of growth also creates the legal battles of the second driver – the public understanding of that technology.

    While the ‘lying public’ is not directly involved in patentability decisions, the public ‘at large’ IS involved. To bring new technology to the public for the public’s benefit, the public representatives in the form of judges and justices decide the legal battles, and the legislature (i.e. the public), by time delay, incorporate or correct significant judicial decisions. Judges and justices will find invalid an application or patent that fails to properly explain TO THEM how the application or patent meets the legal requirements, as these deciders understand the technology and the legal requirements.

    That I or anyone else does not agree with a decision or a law cannot change that this is and will be the oscillation of patentability.

    Regardless of the source of the technology, the U.S. is still a primary or destination filing office and as a result, the U.S. both benefits and suffers from this oscillation. The rest of the world may sit by on idle, or as do so many companies, participate by filing an amicus brief and be heard on the technology and legal requirements.

  20. Snide comments aside, there are two drivers of the oscillation of patentability. The first driver is the rapid evolution of technology. The more growth in a region’s technology, the more patents. While this is an ‘obvious’ relationship, it is important in that this direct relationship of growth also creates the legal battles of the second driver – the public understanding of that technology.

    Do you have proof of the assertion that there are more patents when there are more growth? Considering the rapid changes that occurred in the software market before software could be patented, as compared to the far slower pace of development now that software can be patented, the relationship between technology growth and number of patents does not seem obvious.

    While the ‘lying public’ is not directly involved in patentability decisions, the public ‘at large’ IS involved. To bring new technology to the public for the public’s benefit, the public representatives in the form of judges and justices decide the legal battles, and the legislature (i.e. the public), by time delay, incorporate or correct significant judicial decisions. Judges and justices will find invalid an application or patent that fails to properly explain TO THEM how the application or patent meets the legal requirements, as these deciders understand the technology and the legal requirements.

    But are the legislative and legal systems operating in the best interests of the people? Again, it comes down to definitions. What are the best interests of the people?

    That I or anyone else does not agree with a decision or a law cannot change that this is and will be the oscillation of patentability.

    Regardless of the source of the technology, the U.S. is still a primary or destination filing office and as a result, the U.S. both benefits and suffers from this oscillation. The rest of the world may sit by on idle, or as do so many companies, participate by filing an amicus brief and be heard on the technology and legal requirements.

    The rest of the world doesn’t sit on idle – the European Union patent system is quite busy. As is the Japanese system.