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Patentability

USPTO Releases Patent Eligibility Guidance

Posted: Monday, Dec 15, 2014 @ 6:41 pm | Written by Gene Quinn | 10 comments
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Posted in: Authors, Gene Quinn, Government, IP News, IPWatchdog.com Articles, Patentability, Patents, USPTO

Earlier today the United States Patent and Trademark Office released its much anticipated 2014 Interim Guidance on Patent Subject Matter Eligibility, which the in the industry has largely been dubbed USPTO 101 guidance. The guidance, which was signed on December 10, 2014, by USPTO Deputy Director Michelle Lee, will officially publish in the Federal Register on December 16, 2014. This eligibility guidance will become effective immediately upon publication in the Federal Register.

The USPTO explains in the Notice that this guidance is “for use by USPTO personnel in determining subject matter eligibility under 35 U.S.C. 101 in view of recent decisions by the U. S. Supreme Court.”  This latest interim guidance supplements the guidance given by the office in June 2014 relative to the Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. __, 134 S. Ct. 2347 (2014). This guidance supersedes the March 4, 2014, eligibility guidance for claims involving laws of nature, natural phenomena and natural products, which was issued relative to the Supreme Court’s decisions in Mayo Collaborative Serv. v. Prometheus Labs., Inc., 566 U.S. __, 132 S. Ct. 1289 (2012) and Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. __, 133 S. Ct. 2107 (2013).

The USPTO guidance, which in large part is reminiscent of the KSR Guidelines put out by the Office in 2010, goes through cases one by one. The USPTO explains the facts, provides representative claims and then explains the holding in each case so that patent examiners can understand the teaching point of the case and how to apply the holding to similar situations moving forward. Perhaps most notable, at least on the first review, is that the USPTO incorporated the recent Federal Circuit decision in DDR Holdings, where the Federal Circuit (per Judge Chen) found that the software patent claims at issue in the case were patent eligible.



Alice in Blunderland: The Supreme Court’s Conflation of Abstractness and Obviousness

Posted: Thursday, Dec 11, 2014 @ 7:00 am | Written by Ron Laurie | 10 comments
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Posted in: Authors, Guest Contributors, Patentability, Patents

Question: When does a oncuromputer-implemented or Internet-enabled “business method” constitute patent-eligible (aka statutory) subject matter under 35 USC 101?

Answer: Always, unless — (1) the prior art contains a manual (human-implemented, non- automated) counterpart or analog to the claimed method or system, and (2) the manual analog is merely implemented on a computer or via the Internet.

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In Alice v. CLS Bank, the Supreme Court reiterated its Mayo two-step analytical framework for testing a patent claim for subject matter eligibility:

Step One: Does the claim involve an “abstract idea”?

Step Two: Is the abstract idea “merely” implemented on a generic computer, i.e., without any additional inventive contribution?

If the answer to both inquiries is Yes, then the claim covers ineligible (non-statutory) subject matter under 101. On the other hand, if the answer to the first inquiry is No, then there is no need to go to the second step and the claimed subject matter is patent-eligible.



Federal Circuit Finds Software Patent Claim Patent Eligible

Posted: Friday, Dec 5, 2014 @ 2:47 pm | Written by Gene Quinn | 28 comments
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Posted in: Authors, Federal Circuit, Gene Quinn, Government, IPWatchdog.com Articles, Patentability, Patents

Judge Ray Chen of the Federal Circuit, speaking at AIPLA on 10/24/2014.

Earlier today the United States Court of Appeals for the Federal Circuit issued a ruling in DDR Holdings, LLC v. Hotels.com, L.P. The appeal was brought by defendants National Leisure Group, Inc. and World Travel Holdings, Inc. (collectively, NLG), who appealed from a final judgment of the United States District Court for the Eastern District of Texas entered in favor of DDR Holdings. Following trial, a jury found that NLG infringed the asserted claims of U.S. Patent Nos. 6,993,572 and 7,818,399. The jury also found the asserted claims of the ’572 and ’399 patents were not invalid and awarded $750,000 in damages.

On appeal to the Federal Circuit, in an opinion written by Judge Chen and joined by Judge Wallach, determined that the asserted claims of the ’572 patent were anticipated under 35 U.S.C. § 102(a) and, therefore, vacated the award of damages and prejudgment interest to DDR, which had been collectively premised on infringement of the ’572 and ’399 patents and without apportionment.

Of particular interest, the Federal Circuit found that the ‘399 patent constituted patent eligible subject matter, was not invalid and was infringed. This is big news because in the wake of the Supreme Court’s decision in Alice v. CLS Bank software patents have been falling at alarming rate. Assuming this decision stands any further review we finally have some positive law to draw from that will provide clues into how to tailor patent claims to make them capable of overcoming what has become a significant hurdle to patentability— namely the abstract idea doctrine.



Rewriting Patent Law by Judicial Decision – A Conversation with Sherry Knowles

Posted: Friday, Dec 5, 2014 @ 9:30 am | Written by Gene Quinn | 6 comments
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Posted in: Authors, Gene Quinn, IP News, IPWatchdog.com Articles, Patentability, Patents

Sherry Knowles

Recently I had the opportunity to speak with Sherry Knowles on the record. Knowles is the former the Senior Vice President and Chief Patent Counsel of GlaxoSmithKline who took on the USPTO and prevailed during the claims and continuation saga in 2007-2008. She has since moved on to found her own strategic consulting firm. I caught up with her in advance of her speaking at Managing IP’s European Patent Reform Forum, which will take place in Silicon Valley on December 10 and New York on December 12. Part 1 of our interview was devoted primarily to a discussion of what lies ahead as Europe embarks on substantial procedural reform and harmonization across the EU.

What appears below is the final segment of my interview with Knowles. In this installment we get into a passionate discussion of obviousness, addressing recent Federal Circuit decisions that really should have everyone scratching their heads. While the law is not always applied as written, if the law of obviousness were ever applied literally as written by the Supreme Court and Federal Circuit could anything ever be patented any more?



Freeman-Walter-Abele – A Tortured History of Software Eligibility

Posted: Tuesday, Dec 2, 2014 @ 9:00 am | Written by Gene Quinn | 6 comments
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Posted in: Authors, Gene Quinn, IP News, IPWatchdog.com Articles, Patentability, Patents, Software, Technology & Innovation

This is part 2 of a multi-part series exploring the history of software patents in America. To start reading from the beginning please see The History of Software Patents in the United States. For all of our articles in this series please visit History of Software Patents. 

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The so-called Freeman-Walter-Abele test has been defunct for quite some time, dating back to the Federal Circuit doing away with the test in In re Alappat. Nevertheless, the Freeman-Walter-Abele test is quite an important step in the history of software patents in the United States. The reason to spend a significant amount of time discussing the rise and fall of the Freeman-Walter-Abele test is three-fold.

First, the test was widely criticized (rightfully so) as being so flexible that any District Court Judge or three-Judge panel of the Federal Circuit could apply it to justify any preconceived notions and ideological preferences.  Indeed, the Freeman-Walter-Abele test proved to be anything but objective.  The test was unworkable and did not introduce certainty; it introduced unpredictability, which must be avoided in at all costs in laws relating to property and in laws relating to business.

The second reason to focus on the Freeman-Walter-Abele test is because there is no way to ignore the fact that the more recent tests in the software space are best characterized as versions of the Freeman-Walter-Abele test in disguise.  Under the Freeman-Walter-Abele test there needed to be some physical, tangible link to the process steps, which looks eerily like the machine component of the Bilski machine or transformation test. Furthermore, under the Freeman-Walter-Abele test it is not enough that the patent claim be drafted as a method, but rather the process must be linked to one or more elements of a statutory apparatus claim that itself would meet the requirements of section 101. The similarity with the machine-or-transformation test is again striking.



The History of Software Patents in the United States

Posted: Sunday, Nov 30, 2014 @ 10:30 am | Written by Gene Quinn | 8 comments
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Posted in: Evolution of Technology, Gene Quinn, IP News, IPWatchdog.com Articles, Patentability, Patents, Software, Software Patent Basics, Technology & Innovation

Despite what you may have heard to the contrary, software patents have a very long history in the United States. Computer implemented processes, or software, has been patented in the United States since 1968. The first software patent was granted by the United States Patent and Trademark Office (USPTO) on April 23, 1968 on an application filed on April 9, 1965, Martin A. Goetz, a pioneer in the development of the commercial software industry, was the inventor of the first software patent ever granted, U.S. Patent No. 3,380,029. Several years ago PBS Digital Studios profiled Goetz and his pursuit of the first software patent.

To listen to the critics of software patents you would never know that software has been patented in the United States for nearly 50 years. The critics erroneously claim that the Federal Circuit first allowed software patents by effectively overruling the Supreme Court, but the Federal Circuit didn’t come into being until 1982, which is some 14 years after the first software patent issued, and after Supreme Court consideration of both Gottschallk v. Benson and Diamond v. Diehr.

Today software patents are under attack in the Courts.  “[T]he Supreme Court and now this Court of Appeals for the Federal Circuit seem to be not considering the fact that the United States is leading in many of these emerging technologies and specifically thinking about software,” said Bob Stoll, former Commissioner for Patents and current partner at Drinker Biddle, during our recent webinar conversation on patent eligibility. Indeed, software is very important to the U.S. economy. According to the Government Accountability Office software-related innovations are found in 50% of all patented innovations. Without the availability of patent protection individuals, entrepreneurs, small businesses and start-ups will opt to keep their innovations secret rather than lay them open for inspection (and stealing) by much larger, well-funded entities who have long since lost the ability to innovate.



A Rush to Judgment on Patentable Subject Matter

Posted: Friday, Nov 21, 2014 @ 2:16 pm | Written by Ron Laurie | 73 comments
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Posted in: Authors, Federal Circuit, Government, Guest Contributors, IP News, IPWatchdog.com Articles, Patentability, Patents

Should a District Court decide the question of patent-eligible subject matter under Section 101 as a “threshold issue” at the outset of the case – i.e., without the benefit of expert testimony and/or claims construction?

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Former CAFC Chief Judge Rader at AIPLA on 10/25/14.

On November 14, the Federal Circuit issued its third opinion on the question of whether the claims in Ultramercial v. Hulu & Wild Tangent describe patent–eligible subject matter under 35 USC 101. In the first two decisions, the panel consisting of Chief Judge Rader and Judges Lourie and O’Malley, reversed the District Court’s granting of defendants’ Rule 12(b)(6) motion to dismiss based solely on the pleadings, i.e., prior to any discovery, expert testimony or formal claim construction.

In the latest decision (“Ultramercial-3”), the panel reached the opposite conclusion and affirmed the dismissal. This apparent turnaround was based on two intervening events: (1) the Supreme Court’s Alice decision in June; and (2) the fact that Chief Judge Rader was no longer on the court, and his place on the panel was taken by Judge Mayer. Much has, and will be, written about the first of these factors, so I would like to focus on the second, and in particular, the diametrically opposed views of Judges Rader and Mayer on a very important procedural issue; namely, whether the lack of patent-eligible subject matter should be a basis for dismissing a case at the outset based only on the “intrinsic” evidence, i.e., the patent itself and its prosecution history in the USPTO, without any discovery, expert testimony and/or claim construction. Notwithstanding the importance of the substantive Alice holding re how to distinguish a claim to an abstract idea from one that has a practical application, the procedural question is at the heart of the reversal of the CAFC’s holding in Ultramercial-3. The two judges’ opposing perspectives can most clearly be seen by comparing Judge Rader’s opinion of the court in Ultramercial-2 with Judge Mayer’s concurrence in Ultramercial-3.



A Patent Eligibility in Crisis: A Conversation with Bob Stoll

Posted: Friday, Oct 10, 2014 @ 9:00 am | Written by Gene Quinn | 4 comments
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Posted in: Gene Quinn, Interviews & Conversations, IP News, IPWatchdog.com Articles, Patentability, Patents

Bob Stoll

On September 4, 2014, I had the opportunity to do a webinar conversation with Bob Stoll, former Commissioner for Patents at the United States Patent and Trademark Office and current partner at Drinker Biddle in Washington, D.C. Our wide ranging discussion lasted for just over one hour. This conversation, the first of many, was made possible with support from Innography, which is one of our sponsors on IPWatchdog.com. You can access the entire recording, which is free, by visiting Patent Eligibility in a Time of Patent Turmoil.

What follows is a bit of our conversation to wet your appetite. We discuss the Supreme Court generally, the lack of technical expertise at the Supreme Court, the realities of creating software, amicus briefs, the ramifications for watering down patent rights, the need for bright line rules and whether Congress needs to get involved.

STOLL: As someone very interested in the patent arena and getting the standards correct, I’ve been really worrying about things. I think we are in a very confusing state at the moment. I think that the courts are actually undermining patent eligibility in many different areas. And the irony seems to be, Gene, that the Supreme Court and now this Court of Appeals for the Federal Circuit seem to be not considering the fact that the United States is leading in many of these emerging technologies and specifically thinking about software and diagnostic methods and personalized medicine and gene sequences. I mean we are actually leading the world in this subject matter. We’ve developed these emerging technologies. We’re quite good at building upon a base of patents in these areas and I don’t think anybody’s taking into consideration the job creation and economic growth that these industries bring to the United States before mucking around in the standards.



Dark Days Ahead: The Patent Pendulum

Posted: Wednesday, Oct 1, 2014 @ 8:05 am | Written by Gene Quinn | 20 comments
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Posted in: Anti-patent Nonsense, Apple, Companies We Follow, Gene Quinn, IBM, IP News, IPWatchdog.com Articles, Patentability, Patents, Twitter

Editorial Note: This article is part 1 of a 2 part series adapted from a presentation I gave earlier this week at the annual meeting for the Association of Intellectual Property Firms (AIPF).  CLICK HERE for my PowerPoint presentation.

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Gene Quinn at the AIPF Annual Meeting in Washington, DC, September 29, 2014.

Today I am going to talk about what I call the patent pendulum. When Todd Van Thomme and I originally started talking about what I would talk about today I said that there would undoubtedly be something that comes up at the last minute. I even joked that I might wind up talking about how the Supreme Court actually got the Alice decision right, surprising us all and saying once and for all that software is clearly patentable. We all know it didn’t turn out that way. So the title of my presentation today is this: Dark Days Ahead: The Patent Pendulum.

As you are probably all familiar, patent law never stays the same in the same spot. It is always swinging one or another, either swinging more towards stronger patent rights and the patent owner, or away from strong patent rights and away from the owner. It has been that way throughout history.

Normally what’s happened is that we’ve seen the pendulum swing over longer periods of time, like over decades, and then it’ll move away. For example the 1952 Patent Act was premised on the fact that Congress didn’t like the way the law was developing over the preceding years and wanted more things be patentable, hence the 1952 Patent Act did away with the flash of creative genius test. So things swung back toward a more patent friendly law, at least for a while. And then in the 1970s no courts ever saw a patent that actually had valid patent claims. This famously prompted Congress to create the Federal Circuit. Under the guidance of Chief Judge Markey and Judges like Giles Sutherland Rich and Pauline Newman, who is still on the court, the pendulum swings back toward the patent owner once again.



The Broken Patent-Eligibility Test of Alice and Mayo: Why We Urgently Need to Return to Principles of Diehr and Chakrabarty*

Posted: Thursday, Sep 25, 2014 @ 8:00 am | Written by Eric Guttag | 22 comments
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Posted in: Authors, Eric Guttag, Government, Guest Contributors, IP News, IPWatchdog.com Articles, Patentability, Patents, US Supreme Court

Chief Justice Warren Burger (L) authored Diamond v. Chakrabarty, while then Justice William Rehnquist (R) authored Diamond v. Diehr.

For those in the patent law world who may have been hiding under a rock, we have been flooded recently with lower court rulings on patent-eligibility under 35 U.S.C. § 101 after Alice Corp. v. CLS Bank International. Like a tsunami, these lower court rulings are uniformly sweeping away any patent in its wake as being directed to merely an “abstract idea” that doesn’t provide “something more.” Those quoted words are taken from Our Judicial Mount Olympus’ two-part test in Alice which is derived largely in part from the so-called “framework” of Mayo Collaborative Services v. Prometheus Laboratories, Inc. for separating patent-ineligible “claims to laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” See Ignorance Is Not Bliss: Alice Corp. v. CLS Bank International*

Briefly, the two-part Alice test says: (1) “determine whether the claims at issue are directed to one of those patent-ineligible concepts”; and (2) “search for the ‘inventive concept’ —i.e., “an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” In every court case I’ve read so far, all of those lower court rulings have dogmatically (and restrictively) applied this two-part Alice test to rule the patent claims on systems and/or methods (all involving so-called “business methods”) to be patent-ineligible under 35 U.S.C. § 101. In fact, I’ve only seen one reported PTAB decision (U.S. Bancorp. v. Solutran, Inc.) where patent claims on systems and/or methods involving these so-called “business methods” passed muster under this two-part Alice test.