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?

On July 19, 2012, I interviewed Bob Stoll, former Commissioner for Patents of the United States Patent and Trademark Office.  The interview took place in a conference room at Drinker Biddleon K Street in Washington, D.C.  After 29 years working for the USPTO and a total of 34 years working for the government, Stoll retired on December 31, 2011.  He then started his new, second career as a private citizen and all around patent specialist at Drinker Biddle in the firm’s Intellectual Property Group.

In part 1 of my interview with Stoll we discussed his adjusting to life in the private sector, the fact that he doesn’t enjoy the billable hour part of private practice (just like every other attorney I know) and we discussed politics a bit, as well as the U.S. economy and innovation policy.  Part 2 of my interview, which appears below, picks up where we left off discussing Presidential politics and the buzz that engulfs D.C. every 4 years.  We then move on to talk about how innovation drives the U.S. economy and I get his thoughts on why we haven’t seen a great new technology that has spawned an entirely new industry as we have coming out of so many recessions in the past. We then finish part 2 discussing changes to the patent examination process and how to streamline the examination process.

One week ago, on July 18, 2012, Justice Antonin Scalia of the United States Supreme Court sat down for an interview with Piers Morgan of CNN.  See Scalia interview transcript. During the interview Morgan asked Scalia what his hardest decision has been while on the Supreme Court.  This was the back and forth that ensued:

MORGAN: What has been your hardest decision, do you think?

SCALIA: My hardest?

MORGAN: Yes.

SCALIA: You don’t want to know.

MORGAN: I do want to know.

SCALIA: No, it’s the dullest case imaginable. They — there is — there is no necessary correlation between the difficulty of a decision and its importance. Some of the most insignificant cases have been the hardest. And…

MORGAN: What has been the one that you…

SCALIA: It would probably be a patent case.

You want me to describe it really?

MORGAN: No, I don’t.

(LAUGHTER)

SCALIA: No. Of course. (LAUGHTER)

I thought it might be fun to ask some industry insiders what their guess was as to the unnamed case Justice Scalia was thinking of as the “hardest decision.”  Some of those I asked didn’t offer a guess, but rather took the opportunity to discuss the aforementioned Scalia statements more generally.  Those “musings” will be published tomorrow.

In the recent patent case of Mayo vs. Prometheus Labs, the United States Supreme Court continued its pattern of restricting the scope of patentable subject matter under 35 US 101. Historically, patents had been strictly limited to processes, machines, compositions of matter and articles of manufacture. Excluded from eligibility were business methods, software, laws of nature, naturally occurring phenomena and mathematical formulas. Then the US Court of Appeals for the Federal Circuit began to expand the patent eligibility rules.

In Diamond v. Diehr, decided in 1981 by the United States Supreme Court, established that an un-patentable formula could be transformed into a process by the addition of method steps after the formula. Most would agree, however, that software did not widely become patent eligible until 1994 when the Federal Circuit in the Alappat case held that a programmed computer was essentially a machine and when that same computer was programmed differently, it became a second different machine – both patentable. The Alappat holding led to the acceptance of “software plus token hardware” as being patentable.  Ultimately, the Alappat ruling would give rise to the State Street Bank case, decided in 1998 by the Federal Circuit, which held that business methods were patentable.

Yesterday The Hartford announced via press release that it had invented a faster way to deliver life insurance, which is now patent pending.  Can you that be true?  As with many things associated with the law, particularly patent law, a simple, straightforward answer is not possible.  In a nutshell, it is possible that one could patent a method of more quickly delivering life insurance if the process is new and non-obvious.  However, given the law that the United States Patent and Trademark Office is required to apply there will need to be much more than a real world business method, or “pure business method” as they are sometimes referred to.

“Today’s consumers are used to buying products online and receiving them at home within 48 hours,” said Brian Murphy, who heads The Hartford’s life insurance business. “We see no reason why they should have to wait more than a month to receive a new life insurance policy. By creating a new way of assessing a person’s risk factors and reordering the underwriting process, we can now provide consumers with life insurance coverage in a fraction of the time it used to take.”  But surely a reordering of the underwriting process isn’t enough for a patent, is it?

In Ultramercial, the patentee (Ultramercial) asserted that U.S. Pat. No. 7,346,545 (the ‘545 patent) was  infringed by Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent,  Inc. (“WildTangent”).  The ‘545 patent,relates to a method for distributing copyrighted products (e.g., songs, movies,  books, etc.) over the Internet for free in exchange for viewing an advertisement with the advertiser paying for the copyrighted content.  What is interesting in this case is that Claim 1 of the ‘545 patent that is allegedly infringed by Hulu, YouTube, and  WildTangent recites a method having not one, not two, but eleven total steps.  (Side note:  One might wonder how anyone can infringe an eleven step method.)  WildTangent’s motion to dismiss for failure to state a claim was granted by the district  court based on the claimed method being patent-ineligible under 35 U.S.C. § 101.  (Hulu and YouTube were dismissed from the  case apparently for other reasons.)

Just as all of us have slowly started to absorb the implications of the remand in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, as well as the triumvirate of opinions in Association for Molecular Pathology (AMP) v. USPTO, on the standard for patent-eligibility under 35 U.S.C. §101, the Federal Circuit (finally) issued its long awaited (by some of us) remand decision in Classen Immunotherapies, Inc. v. Biogen IDEC. That there was a majority (and a dissenting) opinion in the remand of Classen wasn’t surprising. But that there was yet a third “additional views” opinion would likely not have been predicted by anyone. And it is that “additional views” opinion, along with the majority and dissenting opinions, that will certainly generate a “firestorm” through the Federal Circuit, and which may eventually reach the Supreme Court. The judicial donnybrook on the question of what the standard is (or should be) for patent-eligibility under 35 U.S.C. §101 is about to begin in earnest.

As my fellow patent attorney, Kevin Noonan, poignantly says on Patent Docs, the Classen remand decision “[couldn’t] be more different from the Federal Circuit’s earlier decision.” That earlier decision (with Judges Moore and Newman on the panel), which came out not long after the Federal Circuit’s famous (and some would say “infamous”) en banc Bilski decision, is astounding for its brevity (one paragraph of 69 words), or as Kevin also poignantly observed, the claimed method was longer than the opinion by 20 words. As I also commented when that earlier opinion came out, it was ghastly for completely failing to explain how the “new” Bilski “machine or transformation” test was applied to the claimed method. See CAFC: Method for Calibrating Drug Dosage is Transformative.

This week marks the first anniversary of the Supreme Court issuing its decision in Bilski v. Kappos. The decision held that the machine-or-transformation test is not the exclusive test for patent eligibility, and that the three traditional exclusions of natural phenomena, abstract ideas, and laws of nature still apply.

Since that time, 182 decisions involving statutory subject matter eligibility have been issued by the USPTO’s Board of Patent Appeals and Interferences (“the Board”). District Courts issued 6 decisions in the past year that substantively addressed statutory subject matter under § 101, while the Federal Circuit issued 3 decisions on the subject. The day after Bilski issued, the Supreme Court denied cert in In re Ferguson, and just recently picked up Mayo Collaborative Servs. v. Prometheus Labs for review.  See Supreme Court Accepts Appeal on Patented Medical Diagnostics.

The United States Patent and Trademark Office is radically updating the Patent Bar Examination starting in April 2011.  Since I teach the PLI Patent Bar Review Course that has required John White and I to revise our materials.  One of the new things tested will be the recently released 112 Guidelines, which are full of great information and explanation, particularly relating to computer implemented processes; what many would call software.  Being the “software guy” one of my responsibilities has been to work on the 112 Guidelines and the Bilski Guidelines for the PLI course.  So I thought I would take this opportunity to write, once again, about how to disclose computer implemented inventions to satisfy the disclosure requirements, which are embodied specifically in 35 U.S.C. § 112.

The statutory requirements for computer-implemented inventions are the same as for all inventions.  That means that in order to be patentable the invention must meet the patent eligibility test in 35 U.S.C. § 101, the invention must be new (§ 102), it must be non-obvious (§ 103) and it must be adequately described (§ 112).  Since the United States Supreme Court announced its decision in Bilski v. Kappos, the United States Patent and Trademark Office has continually urged patent examiners to get beyond the § 101 inquiry except in extreme cases.  Prior to the Supreme Court’s Bilski decision many examiners would simply see a computer-implemented method and issue a blanket and rather non-specific rejection asserting that the invention was not patent eligible subject matter under § 101.  The USPTO focus on getting past § 101 and to the meat of the invention means that such rejections are no longer the norm.  It also means that the Patent Office is pushing the real question about whether an patentable invention is presented into the adequate description space pursuant to § 112.  Thus, a thorough and complete description is absolutely essential when your invention relates to a computer-implemented method, whether it is software, an Internet processes or a business method.

At this time of the year all typically sit back and reflect on the year that has been, spend time with family and friends, watch some football and set a course to follow into the new year.  It is also that time of the year where we are inundated with lists, top 10 this, top 10 that, it gets rather mind numbing after a while.  So with that in mind — I have my own top 10 list.  I know, I know, but they are so much fun to put together and there is something useful about looking back and reflecting that helps put things into perspective.

Without further ado, here are the top 10 events that shaped the patent, innovation and intellectual property industry during 2010 — at least according to me, and with a heavy patent emphasis.  What did you expect?

On Friday, December 17, 2010, the United States Court of Appeals for the Federal Circuit issued a decision in one of the patentable subject matter cases that was returned to the Court by the Supreme Court in the wake of the Supreme Court’s decision in Bilski v. Kappos. Prometheus Laboratories, Inc. v. Mayo Collaborative Services first reached the Federal Circuit on an appeal brought by Prometheus, challenging the final judgment of the United States District Court for the Southern District of California. The district court had granted summary judgment of invalidity of U.S. Patents 6,355,623 and 6,680,302 under 35 U.S.C. § 101. In the original case the Federal Circuit held that the district court erred as a matter of law in finding Prometheus’s asserted medical treatment claims to be drawn to non-statutory subject matter under the machine-or-transformation test, which at the time was the definitive test for determining the patent eligibility of a process under § 101. In Bilski, however, the Supreme Court held that the machine-or-transformation test, although “a useful and important clue,” was not the sole test for determining the patent eligibility of process claims. The Supreme Court vacated and remanded the Prometheus case for further consideration in light of Bilski v. Kappos. On remand, once again, the Federal Circuit held (per Judge Lourie with Chief Judge Rader and Judge Bryson) that Prometheus’s asserted method claims are drawn to statutory subject matter, reversing for the second time the district court’s grant of summary judgment of invalidity under § 101.

Since at least 1998 business methods have been patentable in the United States. This is thanks to the decision of the United States Court of Appeals in State Street Bank & Trust Co. v. Signature Financial Group, Inc., which categorically and unceremoniously did away with what had previously been come to be known as the business method exception to patentability. Essentially, the business method exception said that no method of doing business deserved patent protection. The Federal Circuit, per the iconic Judge Giles Sutherland Rich, pointed out that the business method exception had never been invoked by either the Federal Circuit or its predecessor court the CCPA. Furthermore, the case frequently cited for establishing the business method exception did not ultimately rely on that exception to deny patentability, meaning it was nothing more than dicta. The Court explained that “[s]ince the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method.”