Yesterday I published my Patent Wishes for 2010.  Those things identified were largely industry wide wishes or desires and did not focus on any particular category or classification of invention.  I wrote about how the monstrosity of an obviousness test we are hobbled with thanks to the Supreme Court’s KSR decision must be changed and how Congress needs to take their head out of the sand and fund the Patent Office adequately.  These and the other things I wrote about would benefit the patent system as a whole and assist the Patent Office in streamlining the patent process, which benefits everyone.

Notwithstanding, there were a few things I purposefully did not include in my 2010 wishes.  The word “wish” does not really capture the essence or depth of the magnitude of the desire I have for a few certain, industry specific events that will take place at some point during 2010.  So rather than “wish” for certain things I thought it might be appropriate to beg for them instead.  Thus, I beseechingly request the following: (1) a decision from the Supreme Court in Bilski that does no damage; and (2) an end to the nonsense surrounding gene patents and biologics.  I also wish with the utmost urgency that the City of Alexandria stop issuing parking tickets after hours.  After attending the USPTO Inventors Conference I  received a parking ticket at 8:27 pm, while parked at a meter requiring payment only until 5 pm.  I challenged, and lost, which cost me an extra $10.  Go figure!

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!

Headgear for attaching toy, US Patent No. 7,621,000

It should come as no surprise, but I think software and business methods should be patentable, assuming of course that they are new and non-obvious.  There is simply no justifiable reason to carve out an exception for software or business methods, and I am getting more than just a little sick and tired of the whining and complaining from the anti-software patent crowd.  If you listen to what they say it is extremely pathetic, and oh so revealing.  The primary argument is that software patents inhibit innovation, which is pure fiction of course.  This devolves quickly into the substance of what they believe; namely that software should be free, which really means you create it and I steal it.  They whine and complain that it is unrealistic and unfair for them to have to search patents before they start writing code, as if that is any kind of justification.  Being lazy and then having the audacity to complain is nothing short of nutty.  Yes, they complain that they shouldn’t have to engage in the same business practices as every other business because they are special and software should be free.  You can see the circular, self-serving and ridiculous logic.  They think they are different, which is certainly true just not for the reasons they think.  They are so myopic that they actually believe business realities shouldn’t apply to them, only others should be required to do patent searches and respect patents.  Anyone with teenagers is likely familiar with such self serving logic and the faux victim approach to life.

Recently I received an e-mail with a link alerting me to something posted on the 271 blog relating to Bilski. The video (viewable on the 271 blog) is taken from a movie about World War II that focuses at least in part on Adolph Hitler. The video posted is from a scene that appears to be taking place in Hitler’s bunker, and seems to be toward the end of the war when only bad news about the Allied advance was being given to Hitler. This video seems to be rather popular on the Internet because since it is not in English subtitles can be inserted to turn the clip into a tool to promote whatever is desired by those creating the derivative work. In this particular case the subtitles added relate to the Bilski case. I have been conflicted by how to handle this. It seems it would be of interest to many patent attorneys following the Bilski matter, but I am uncomfortable about using any Nazi or Hitler references in the same breathe as patentability.  There is simply no comparison and it seems there is something not right about using the most hated man in human history in this way, or in any way, suggesting even tongue in cheek that the atrocities of the Third Reich in any way are comparable on any level to the ongoing patent rights debates. Nevertheless, there is something that was inserted into the end of the video that does deserve some attention. There is no denying that the assault on intellectual property rights, particularly patent rights, is a major problem and if it continues innovation will be seriously and negatively impacted. There is also no denying the fact that those boldly challenging patent rights are anti-patent and would prefer no patents at all. Therefore, while your particular innovations may not be challenged directly the assault on patent rights in one sector is and should be a concern for all innovators and patent owners. It is time for us – all to stand up for innovation and take action.

After Monday’s oral argument, many are trying to divine how the U.S. Supreme Court will rule in the Bilski v. Kappos, and whether the Federal Circuit’s “machine or transformation” test will survive. Having now read the oral argument transcript, my own prognostication is that the Federal Circuit’s “machine or transformation” test will be trounced as too inflexible, although the Supreme Court may still retain it as a test, but not the only one, like the “teaching, suggestion and motivation” (TSM) test in KSR v. Teleflex. I also predict that the Supreme Court will affirm the PTO ruling that Bilski’s claim on a method for hedging risks is not “patentable-eligible” subject matter under 35 USC § 101, but on the ground that it covers an “abstract idea,” as suggested by Judge Rader’s dissent in Bilski.

John Paul Stevens, Associate Justice United States Supreme Court

Now that the Bilski oral arguments are complete and the case has been submitted to the Court for consideration the guessing game begins.  Normally trying to figure out what a court will do is a waste of time, particularly so when that court is the Supreme Court, which is not bound by precedent of any kind given that they are the court of last resort.  Having said that, the Bilski Federal Circuit decision is of such importance and inventors and clients cannot simply stand still waiting for a decision, holding themselves up until things become clear.  You simply cannot wait to file a patent application in most cases, and there is the distinct possibility that the Supreme Court will not actually answer the questions or answer them in a way that provides clarity moving forward.  The Supreme Court has been known to provide some guidance about what is not appropriate to bookend the limits of what is acceptable, then kicking a matter back down for lower courts to address the minutia.  That is certainly frustrating, but in keeping with a small “c” conservative judicial approach where nothing more than is absolutely necessary has been said.  If only the Federal Circuit had done that we wouldn’t be here.  In trying to piece together what might happen I think we should dissect some of the patent writings of the Justices, so without further ado lets begin with Justice John Paul Stevens.

Unlike Gene I did not really plan very well. I did not have credentials and am not (yet) a member of the Court. So, I was in line with the public. A patent centric public, but the public none-the-less. My fellow line standers included: Law students headed to taking the patent bar; a Finnegan partner (made me feel a little better about my failure to plan), and other patent world folks. The highlights: for this argument, the general admission line formed before midnight on Sunday! Only the 1st 40-50 of the 300+ people in line were admitted. The rest of the seats were taken by press, court members, and those with reservations. So, it was, even in the world of the Supreme Court, a big case. The line for admission became the 5 minute (sightseeing/tourist) line in short order. We were shuffled through, some re-cycling themselves in line so as to hear as much of the argument as they could. Real dedication here. Outside, tourists had asked what was so important that had all the people lined up; when told it was a patent case, universally none could understand why that would matter, and generate such a line!

A long line for Bilski Oral Argument

At 2pm ET on November 9, 2009, Chief Justice John Roberts gaveled the session to a close announcing that the case had now been submitted. The arguments were good, and the Court was most assuredly hot, peppering both sides with question after question seeking to probe the issues. It is clear that the Supreme Court did their homework and spent no time gravitating to the weak points of the parties. Representing Bernard Bilski was Michael Jakes, who was continually questioned about business methods in general and whether the framers or the authors of the 1952 Patent Act could have ever contemplated business methods being patentable. Representing the United States Patent Office, Deputy Solicitor General Malcolm Stewart was questioned repeatedly with respect to the “extreme” decision reached by the Federal Circuit, not to mention the fact that the government’s position is that an old computer running new software could somehow potentially be patented as a new machine. At the end of the day I have to think that it does not bode well for Bilski and his method, but if the questions raised by the Supreme Court are any indication it seems like the Federal Circuit will be overruled and the software and medical industries will dodge a Bilski bullet.  For more analysis be sure and check back in the coming days, weeks and months, and join me for a PLI Bilski briefing on Wednesday, November 11 at 1pm ET.

Later today the United States Supreme Court will hear oral arguments in the Bilski matter. It is not an overstatement to say that the fate of much future innovation rests squarely on the Supreme Court getting this one right, so lets hope for the best and pray that they do get this one right. There is every reason to believe that the Supreme Court will accurately and appropriately reach a sensible decision relative to patentable subject matter, but there is also at least some fear that they may get it wrong, and wrong to the point where vast amounts of innovation will cease, stall and simply never develop. Because the Federal Circuit as a whole sitting en banc decided not to demonstrate judicial restraint and completely ignored long standing judicial principles associated with answering only the limited questions presented by the case, far more was said in Bilski than necessary, and it is safe to say that those in the majority in the CAFC Bilski decision could never have known the extent of the fall-out caused by opening a patentable subject matter Pandora’s Box. But that is precisely why judges are not supposed to be activist, why they are supposed to undertake a conservative approach and only decide the narrow question before them. Too bad the majority of the CAFC missed those days in law school classes where we all cursed the Supreme Court for not addressing the issue of social importance and instead decided some narrow, inconsequential issue or simply punted it back to the lower courts as a result of some technical matter.  Had they not maybe they would have known to stick to the issue at hand.

US Supreme Court Building, Washington, DC

On Monday, November 9, 2009, the United States Supreme Court will hear oral arguments in the much anticipated Bilski case, which could well decide once and for all whether business methods and software remain patentable in the United States. I will be in attendance at the oral argument, which will take place after a lunch recess. I will be joined by John White , the creator of the PLI Patent Bar Review Course and patent attorney with Berenato & White. My intention is to write and post throughout the day on Monday, leading up to the oral arguments and then in the afternoon as soon as I an after oral arguments are completed. John and I will then participate in a PLI Hot Topic Briefing on Wednesday, November 11, 2009 from 1pm to 2pm ET. We will be joined on this briefing by Scott M. Alter of Faegre & Benson LLP and Douglas R. Nemec of Skadden, Arps, Slate, Meagher & Flom LLP, both of whom along with John White are co-chairs of PLI’s 4th Annual Patent Law Institute. The title of the PLI briefing is Bilski Supreme Court Arguments: Eyewitness Report and Expert Analysis, and CLE credit is available. As always, PLI Privileged Members may attend for free, as they may do with virtually all PLI programs. Those who are not Privileged Members can also join in the briefing for a standard fee. PLI has also decided to make this briefing and other pre-recorded Bilski presentations freely available to any members of the media who may be interested in obtaining a deeper understanding of the issues surrounding this extremely important case.

On October 30, 2008, the United States Court of Appeals for the Federal Circuit issued a landmark decision in In re Bilski. The United States Supreme Court has accepted the Bilski case and will hold oral arguments on Monday, November 9, 2009. My plan is to be present for the oral arguments, and I have submitted a request to the Supreme Court for press credentials for the day. I still have not heard back from the Clerk of the Supreme Court, and it is my understanding that the Supreme Court has never provided press credentials for those who write primarily online, which is interesting in and of itself given the nature of the Internet and the fact that niche reporting is done far better (typically) by bloggers. Nevertheless, in order to prepare for the Supreme Court oral argument I am picking up the History of Software Patents series. The History of Software Patents Part I appeared in January 2009, and focused on US Supreme Court cases in the software space, namely Gottschalk v. Benson and Diamond v. Diehr. The History of Software Patents Part II appeared in April 2009 and focused on Federal Circuit development of law in Arrhythmia Research Technology, Inc. v. Corazonix Corp., and the supposed demise of the Freeman-Walter-Abele test. Part III now picks with In re Alappat.

Steve Jobs, with hair. His official photo from his Apple Bio page.

Earlier today a pending non-provisional utility patent application assigned to Apple Computer published.  This application, US Patent Application 20090265214, is titled Advertisement in Operating System, and covers exactly what the title implies; namely an operating system that is capable of displaying a variety of advertisements to users. You are likely to have heard of the first listed inventor, Steven Jobs, the CEO and co-founder of Apple Computer, Inc. While it is difficult to know the purpose and strategy behind a patent application, the attorneys at Fish & Richardson in Minneapolis, Minnesota, who drafted and filed the patent application certainly did a very good job describing just about every conceivable feature and alternative that could coincide with the displaying of advertisements to users of an operating system. It almost sounds funny to call the displaying of advertisements within an operating system “a feature,” particularly given the annoying, ubiquitous and ever more intrusive nature of advertising these days. In any event, the patent application is well written, albeit it written in pre-Bilski style at least with respect to the claims. If Apple does want to pursue this all the way to a patent I suspect there will be plenty of opportunity to do so, and there will certainly be allowable claims that fall within this disclosure.

Last week I wrote an article titled Inauspicious Start to Greater USPTO Transparency, in which I wrote about how disappointed I was that some things never seem to change at the Patent Office.  I was referring to the fact that a Federal Register Notice had been published on September 17, 2009, and gave until September 28, 2009, to provide comments on the interim Bilski guidelines that the Patent Office wanted in place.  I also wrote about how disingenuous it seemed to be not only because of an 11 day comment period, but because the Patent Office by their own admission was already training patent examiners on the guidelines prior to receiving any comments.  This smacked of the same type of nonsense that happened all the time during the Dudas days, where many hundreds of comments were received and summarily ignored.  It also smacked of CYA requesting comments, which also happened during the Dudas days.  I was disappointed because there was so much hope for a Kappos Administration.  I am extraordinarily happy to report that the United States Patent and Trademark Office has decided to extent the comment period.  I guess things really are changing at the Patent Office, and that is a very good thing and definitely something for all those in the innovation space to be happy about.

Legend has it that Zeus punished Prometheus by binding him to a rock while having his regenerating liver eaten daily by a great eagle. After the case of Prometheus Laboratories, Inc. v. Mayo Collaborative Services, we in the patent world may now be subjected to similar torture in determining when medical/drug dosage calibration methods qualify as statutory subject matter under 35 U.S.C §101. The district court in Prometheus ruled that a patented drug dosage calibration method was non-statutory under 35 U.S.C §101 as essentially correlations of “natural phenomena,” citing Justice Breyer’s dissenting opinion in Laboratory Corp. v. Metabolite Laboratories, Inc. But in the resulting collision with the “machine or transformation” test of In re Bilski, the Federal Circuit held, instead, that this patented method was “transformative,” and therefore statutory subject matter under 35 U.S.C §101.

I am still in San Diego, California at the Annual Conference of the National Association of Patent Practitioners, which is being held at the Embassy Suites Hotel, which is roughly across the street from the U.S.S. Midway.  The conference has been a good one with some excellent presentations.  This morning there was a Bilski presentation, and since then we have been talking about KSR v. Teleflex.  Right now Bruce Stoner, the former Chief Judge of the Board of Patent Appeals and Interferences, is talking about Reexamination generally, and discussing the impact KSR has had on Reexamination decisions.  As it turns out, very few inter partes Reexaminations have reached the BPAI to date, with only 11 decisions having been reached by the Board relating to inter partes Reexaminations, with 10 cases still pending.  With a limited data set it is hard to make broad generalizations, but it seems that in about half of the cases where the examiner has rejected claims during inter partes Reexaminations those rejections have been reversed by the Board.  In a handful of other case the examiner has been affirmed, and in a few cases the examiner was reversed but the claims were rejected on other grounds.  Perhaps this is a self selecting sample, or perhaps the sample is just too small.  It is a little surprising to see the Board reversing examiner rejections in inter partes Reexamination at such a high rate.