Judge Lourie, who was joined by Judges Dyk, Prost, Reyna and Wallach, in CLS Bank v. Alice Corp. wrote: “At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could. Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility.”

One way that Judges probe generalized statements is to look for the boundaries to test the logic. If the statement cannot be stretched to apply to even similar scenarios then the logic of the statement is questioned and believed to be faulty and self-serving. So let’s see if the above statement can withstand even modest scrutiny.

The statement above, by any fair reading, says that if the core of the invention is something that a human could do but slower then the subject matter is patent ineligible. So what about robots? Robots are more efficient, stronger and faster than humans, but a human can do what a robot can do. So are robots patentable?

Chief Judge Rader’s band De Novo should play a dirge tonight.

On May 10, the Federal Circuit issued its en banc opinion in CLS Bank.  Within 48 hours, I had twice read the 135 page decision.  It may be a bullet to the head of the software industry.  Don’t take my word for it:  four different judges say so:

And let’s be clear: if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents. If all of the claims of these four patents are ineligible, so too are the 320,799 patents which were granted from 1998-2011 in the technology area “Electrical Computers, Digital Processing Systems, Information Security, Error/Fault Handling.” Every patent in this technology category covers inventions directed to computer software or to hardware that implements software. In 2011 alone, 42,235 patents were granted in this area. This would render ineligible nearly 20% of all the patents that actually issued in 2011. If the reasoning of Judge Lourie’s opinion were adopted, it would decimate the electronics and software industries. There are, of course, software, financial system, business method and telecom patents in other technology classes which would also be at risk. So this is quite frankly a low estimate. There has never been a case which could do more damage to the patent system than this one.[1]

That parade of horribles is not entirely fair to Judge Lourie’s concurrence.  Judge Lourie based his opinion on the fact that the disputed patent is directed not just to electronics, but to an insignificant use of modern electronics to implement an arguably basic financial transaction.  I doubt that Judge Lourie would expand the holding in CLS Bank far beyond that specific fact pattern.  Nevertheless, as quoted above, the dissenting judges do not share even this much optimism.

While the Supreme Court has done away with the “useful, concrete and tangible result” test from State Street Bank v. Signature Financial, in Bilski v. Kappos, 8 out of 9 Justices (i.e., everyone except Justice Scalia) signed onto an opinion that recognized that the patent claims in State Street displayed patent eligible subject matter. Indeed, the dissenters in Bilski specifically acknowledged that the claims at issue in State Street did not deal with processes, but dealt with machines. See Footnote 40 of the Steven’s dissent.

The import of this is that machines are specifically patent eligible subject matter, so if the claims of State Street are to machines then claims that are similarly configured would also be directed to machines and therefore patent eligible. So if the systems claims at issue in CLS Bank v. Alice Corp. are configured similarly to those that now stand invalid that would mean that Judges Lourie, Dyk, Prost, Reyna and Wallach have ignored the Supreme Court. Any fair comparison of the claims, as shown below, demonstrates this rather conclusively.

Similarly, the United States Supreme Court famously ruled in Diamond v. Diehr, that the United States Patent and Trademark Office inappropriately rejected claims to a computerized process for molding raw, uncured synthetic rubber into cured precision products. Ultimately, thanks to the decision of the Supreme Court the inventors, Diehr and Lutton, received U.S. Patent No. 4,344,142. If the claims in Diamond v. Diehr are similar to those that now stand invalid that would be further proof the Federal Circuit as a whole has ignored the Supreme Court.

By now most are likely already familiar with the unfortunate reality that the United States Court of Appeals for the Federal Circuit issued a non-decision in CLS Bank v. Alice Corporation on Friday, May 10, 2013. There were 10 judges who heard the case en banc, with 7 of the 10 finding that the method claims and computer-readable medium claims were not patent eligible. While there may be reasonable room for a difference of opinion relative to those claims, it was the system claims that specifically and clearly recited tangible structure that has thrown the patent law of software into such disarray. 5 Judges would have found that the systems claims were patent ineligible (Judges Lourie, Dyk, Prost, Reyna and Wallach), and 5 Judges would have found the systems claims were patentable subject matter (Chief Judge Rader, Judges Newman, Moore, Linn and O’Malley). For more see Federal Circuit Nightmare in CLS Bank and 5 CAFC Judges Say Computer Patentable, Not Software and Did the CAFC Ignore the Supreme Court in CLS Bank?

Today, however, I want to write about one of the more bizarre passages I have ever seen in any decision, and then pose an almost unthinkable question: Is IBM’s Watson still patent eligible in the view of Judges Lourie, Dyk, Prost, Reyna and Wallach?

First, let’s start with the passage. Judge Lourie, who was joined by Judges Dyk, Prost, Reyna and Wallach, actually wrote: “At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could. Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility.”

UPDATED 5/12/2013 at 3:31pm

In what can only fairly be characterized as utterly ridiculous, 5 of the 10 judges on the Federal Circuit to hear CLS Bank v. Alice Corporation en banc would find that claims that satisfy the machine-or-transformation test are not patentable. While I think it is inappropriate to find the systems claims patent ineligible that isn’t what makes the decision utterly ridiculous. The decision is an embarrassment because 5 other judges would have found the systems claims patent eligible. Thus, we have an even split of opinion at the Federal Circuit.

The Federal Circuit decision in CLS Bank v. Alice Corp. is now being horribly mischaracterized in the media, which will now only further complicate the matter in the court of public opinion. This decision offers no precedent whatsoever regarding systems claims because it was a tie. Alice Corporation loses the systems claims not because that is the law of the land announced by the Federal Circuit, but rather because a single district court judge determined that the systems claims were patent ineligible. Had that same district court judge found the systems claims patent eligible then Alice would have prevailed.

In other words, the Federal Circuit is essentially abdicating its authority relative to whether systems claims are patentable to the district courts and presumably also to the Patent Trial and Appeals Board at the United States Patent and Trademark Office. Whatever the district court or PTAB does is just fine. Well, not quite.

One of the things that makes protecting computer related inventions tricky is that first you have to define the invention, and defining the invention is not something that is altogether easy when the invention is a computer process or relates to software. Sure, it is easy enough to define a list of desired functionality, and if you have some computer programming skills it is easy enough (after investing the requisite time) to write the code that will enable the functionality, but that which can be protected via patent lies somewhere between the desired functionality and the code, making the defining of the invention rather elusive for some, particularly those who are new to the patent arena.

Further complicating the matter is the reality that over the last several years the law of patent eligibility in the United States has been in flux. It did become largely settled with respect to software and business methods thanks to Bilski v. Kappos, which was decided by the United States Supreme Court. This case left the industry with the so-called “machine or transformation” test, which requires a process to be tied to a particular machine or apparatus, or transform an article into a different state or thing, in order to be patentable subject matter. The Supreme Court determined in Bilski that the machine-or-transformation test is not the only test for patent eligibility, but rather that it was an important clue. But what exactly does that mean?

Over the past year or so ever more patent data has been made publicly available thanks to Google. In collaboration with the USPTO Google is scraping information from the USPTO servers, transferring the many image files into searchable text documents. The availability of this information has allowed companies like Reed Technologies to offer interesting and useful patent analytics. For example, the Patent Advisor™ product, which is powered by PatentCore, allows users to find rejection, allowance, RCE and appeals information relating to individual Art Units and individual examiners. Armed with this information better prosecution strategies can be developed, saving time and money in the long run.

As I have dove into the Patent Advisor statistics I jumped to those Art Units charged with so-called business method patents in class 705. This has lead me to write several articles critical of one Art Unit in particular for having an extremely low allowance rate, with many of those allowances ordered by the Board. For example, see Allowance Rates for Art Units Examining Business Methods.

But what is a business method? That is the very question that dogged the United States Supreme Court in Bilski. In fact, a definition of “business method” has proven to be as illusive as a unicorn or Bigfoot. The goal of those who care to try and define “business methods” is almost universally so that they become non-allowable subject matter. But with every definition there comes the realization that some of what seems like it should be swept up in the definition remains on the outside and some things that really ought not to be considered “offensive” business methods are swept up in the definition. The trouble is that methods have been patentable since 1790 in the United States and on some level virtually every method could be characterized as a method of doing business, or more generally a method that facilitates one or another business goal.

Tuesday’s list of issued patents published by the U.S. Patent & Trademark Office includes 27 patents assigned to Cupertino, California device manufacturer Apple Inc. Each week, Apple is awarded a few patents that pertain to their electronic devices or computer systems. This week, Apple was awarded a new design patent for its laptops, as well as patents protecting methods of either creating more rugged touchscreens or finding useful social network recommendations through data analysis.

Here are a few of those recent Apple patents that caught my attention. For more news relating to Apple patents and published patent applications please see our other articles, which can be found at: http://www.ipwatchdog.com/tag/apple-patents/

Portable Computer
U.S. Patent No. D674382

This most recent design patent issued by the U.S. Patent & Trademark Office describes a series of design modifications to Apple’s line of laptop computers, including the device manufacturer’s MacBook and PowerBook models. Claim 1 of this patent protects, “the ornamental design for a portable computer, as shown and described.”

All patented design changes pertain to the layout of the keyboard and trackpad on the laptop’s lower housing. A few different design embodiments are protected in this issued patent; patent diagrams that have a shaded area containing the laptop’s trackpad indicate a metallic surface. As with last week batch of issued patents, Former-CEO and device industry guru Steve Jobs is credited as an inventor on this patent filed in March 2012, months after his passing the previous October.

The U.S. Patent & Trademark Office issued 37 different patents to Apple Inc. on Tuesday, January 8, to protect different devices and computer systems developed by the electronics manufacturer. Some of these protect earlier generations of iPod and iPhone devices that have been sold for a few years. Others protect systems of transferring documents or advertisements among mobile device users. Some of these patent issuances are bittersweet for the company as former CEO Steve Jobs is listed as an inventor on a few of them.

Electronic Devices

U.S. Patent No. D673947
U.S. Patent No. D673948
U.S. Patent No. D673949

A number of patents were issued this week protecting personal electronic devices already produced by Apple. These design patents cover both the first generation iPod Touch, with WiFi (D673947, D673949), as well as the iPhone 3G (D673948). Both items have been sold by Apple since 2008. Claim 1 of each patent simply states, “The ornamental design for an electronic device, as shown and described,” and a few diagrams of each device are also included.

Interestingly, Steve Jobs is listed as an inventor on all three of these patents issued this Tuesday. He is credited as one of at least a dozen credited inventors within each patent. He’s also one of the few to be reported as situated in Palo Alto; the clear majority of inventors were reporting from San Francisco. U.S. Patent No. D673949 was filed in June 2011, just three months before Jobs’ passing in October. The other two were filed in February of that year.

Each week, the U.S. Patent and Trademark Office publishes patent applications, and computer and electronics developer Apple Inc. always has at least a few published patent applications. In this column, we’ll look at some of these published applications, looking for hints as to what new devices or features Apple may have in store for users in the future.

In this edition we explore published patent applications relating to a graphical user interface that will assist users with special needs, such as vision or hearing problems, an ambitious system for generating electricity from stored wind energy, as well as various devices, systems and software more commonly associated with Apple’s various portable electronic devices.

Earlier today in the Federal Register the United States Patent and Trademark Office (USPTO) announced that it was seeking to form a partnership with the software community to enhance the quality of software-related patents.

Say it all together — Hakuna Matada! That will be a phrase you are going to want to keep handy throughout this article. Whenever you start to get dizzy or nauseated simply say — Hakuna Matada! I find that it sometimes helps, at least momentarily.

From the “oh my gosh, no way, are they really serious” department comes an announcement that the USPTO is forming a Software Partnership that will enable stakeholders to come together through a series of roundtable discussions to share ideas, feedback, experiences, and insights on software-related patents. Never has the word “stakeholders” been quite so ominous. I certainly hope the anti-patent “stakeholders” don’t show up with actual stakes, or perhaps pitch-forks, and proclaim themselves ready to storm the castle! Hakuna Matada!

A web analytics company has agreed to settle Federal Trade Commission charges that it violated federal law by using its web-tracking software that collected personal data without disclosing the extent of the information that it was collecting. The company, Compete Inc., also allegedly failed to honor promises it made to protect the personal data it collected.  See Complaint In re Compete, Inc.

Compete is a company that uses tracking software to collect data on the browsing behavior of millions of consumers, then uses the data to generate reports, which it sells to clients who want to improve their website traffic and sales.

The proposed settlement will require that Compete obtain consumers’ express consent before collecting any data from Compete software downloaded onto consumers’ computers, that the company delete or anonymize the use of the consumer data it already has collected, and that it provide directions to consumers for uninstalling its software.

A long line of Federal Circuit precedent holds that a function in a software claim under 35 U.S.C. 112, sixth paragraph, must refer to a corresponding “algorithm” in the specification.  Absence of an algorithm is fatal to the claim. [1]  Clever defense attorneys have used this trick to invalidate many software claims that were perfectly novel and nonobviousness.

Recently, patent scholar Mark Lemley has renewed attention to software claims under 35 U.S.C. 112, sixth paragraph.  Lemley tends to agree with widespread concerns that broad software patents may be deeply problematic.  Lemley encourages strict application of the algorithm requirement to police software patents and resolve these concerns. [2]

Unlike Lemley, I am convinced that the algorithm requirement makes no sense.  The problem is not that the concern about broad software claims is unjustified.  (I think the concern is overblown, but that is not my argument here.)  The problem is that, even if the concern is justified, the algorithm requirement does not solve it.  At least, the requirement does not solve the problem in an appropriate way, as explained below.

Those who have been following comments on the split decision in CLS Bank v. Alice Corp. case will be unsurprised to learn that yesterday the Federal Circuit ordered a rehearing en banc in the matter, vacating the panel decision originally decided on July 9, 2012.

The questions to be addressed on appeal are:

1. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

2. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

The parties have been invited to file new briefs on these questions, and the case will be heard based on the original briefs and any new briefs filed.

This article follows up a post by Gene on 19 September entitled Remembering Nuijten and Comisky 5 Years Later. I commented that in the EPO the practice relating to signals is directly contrary to the U.S.  Gene commented in response, inviting me to write an article on the topic.

It should be remembered that the USPTO and courts traditionally granted signal claims, and Nuijten was an innovative decision and arguably an outlier that deserved more challenge than it received. The pre-Nuitjen position and the desirability of allowing signal claims or claims to computer program products without specifying non-transitory media embodiment is recorded in a paper by Stephen G.Kunin et al.,  Patent Eligibility of Signal Claims, Journal of the Patent and Trademark Office Society, 87, No. 12, 907 – 1002 (December 2005).  Many positive reasons for allowance of such claims are described in that paper, and they are traced back in history to O’Reilly v Morse.

The good news is that signal claims and broad claims to computer program products are obtainable in Europe. However, such claims are only grantable if the necessary language is present in the European application or the International application as filed, otherwise objection will arise under a.123(2) EPC. Further, the EPO rules on priority are strict, and if the necessary language is missing from the US provisional or utility application from which priority is claimed, then signal or unrestricted computer program product claims will not benefit from priority. It is at the time of US filing that the necessary language must be introduced, and in particular entry into the European regional phase is too late.