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Posts Tagged ‘ patent eligible ’

PTO Guidance Offers Keys to Patent Eligibility for Crucial Information Age Patents

Posted: Sunday, Dec 21, 2014 @ 10:30 am | Written by Louis Hoffman | 2 comments
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Posted in: Guest Contributors, IP News, IPWatchdog.com Articles, Patentability, Patents

The Patent Office’s 2014 Interim Guidance on Patent Subject Matter Eligibility released earlier this week represents the third significant hopeful note in a month that the U.S. patent system is beginning to emerge from the dark days of excessive use of an excessively abstract test to bar software and business-method patents as purportedly related to excessively abstract ideas. First read the masterful and reasoned synthesis of Senior District Judge Pfaelzer in The California Institute of Technology v. Hughes Communications (Case No. 2:13-cv-07245-MRP-JEM) (C.D. Cal. Nov. 3, 2014). Then came the Federal Circuit’s opinion finally (huzzah!) upholding a software patent post-Alice in DDR Holdings, LLC v. Hotels.com, L.P. Now, the Guidelines.

Along with some district courts, the USPTO participated in the post-Alice paroxysm of disqualifying software and business-method patent claims. The Office withdrew a few hundred patents from allowance, cramped the business method units’ ability to allow patents they considered new and non-obvious, and triggered a tsunami of (often poorly reasoned and sometimes specious or based on form-paragraph “logic”) Section 101 rejections.

The general overreaction seemed based not on anything the Supreme Court actually said but rather on atmospherics: People took note of the Court’s unanimity, the Alice Court’s refusal to “labor” to define the “judicial exception” (but who else can do so?), and the braying of the anti-patent crowd.



Surviving §101 Step 2: Is there ‘Significantly More’?

Posted: Sunday, Dec 21, 2014 @ 8:00 am | Written by John Kong | 1 Comment »
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Posted in: Guest Contributors, IP News, IPWatchdog.com Articles, Patentability, Patents

Earlier this year the Supreme Court issued a ruling in Alice Corp. v CLS Bank Int’l, which applied the Mayo 2-part test to computer-implemented subject matter.[2] The 2-part test asks: (1) whether the claims at issue are directed to patent-ineligible concepts; and (2) if yes, is there something “significantly more” in the claim to ensure that the claim is not merely covering just the ineligible concept. In part 1 of this article I addressed how to survive §101 challenges based on the first prong of the Mayo/Alice test. Today I discuss how to survive §101 step 2.

If the claim is directed to a patent ineligible abstract idea, then the second step in the §101 analysis is to look at the claimed elements individually and looking at the claim as a whole to determine if there are additional elements that transform the claim into a patent eligible application of the abstract idea. This is also characterized as a search for an “inventive concept,” i.e., an element or combination of elements that ensures the patent in practice amounts to significantly more than a patent on the ineligible abstract idea itself. In Alice, the Court looked at claimed elements individually to see if it was merely “conventional.”[3] The concern is that “[s]imply appending conventional steps, specified at a high level of generality, was not enough to supply an inventive concept.”[4]  Generally linking the abstract idea to implementation on a generic computer or reciting generic computer components is not enough.[5]



Surviving 101 Challenges After Alice Gone Wild

Posted: Friday, Dec 19, 2014 @ 9:30 am | Written by John Kong | 4 comments
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Posted in: Guest Contributors, IP News, IPWatchdog.com Articles, Patentability, Patents

Before the Supreme Court’s decision in Alice Corp. v CLS Bank Int’l [2], Judge Moore said “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.”[3] This concern is premised on about twenty years of patent practice grounded in the en banc 1994 Federal Circuit decision in In re Alappat which previously established the “special purpose computer” justification for patent eligibility under 35 USC §101 for computer-implemented inventions.[4] Alice makes clear that although a computer is recognized as a machine which would fall under one of the statutory categories of §101, that isn’t the end of the inquiry under §101.[5] Instead, the Mayo 2-part test applies to computer-implemented subject matter.[6] The game-changing new rationale, contrary to Alappat, is that “the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.”[7] Simply “doing it” on a generic computer isn’t enough to satisfy §101.[8]



Post-Alice, Allowances are a Rare Sighting in Business-Method Art Units

Posted: Tuesday, Dec 16, 2014 @ 8:00 am | Written by Kate Gaudry | 3 comments
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Posted in: Business Methods, Government, Guest Contributors, IP News, IPWatchdog.com Articles, Patent Prosecution, Patents, USPTO

In June of 2014, the Supreme Court held, in Alice Corporation Pty. Ltd. v. CLS Bank International (“Alice Corp.”), that claims directed to a technique for mitigating settlement risk failed to comply with the patentable-subject-matter requirement of 35 U.S.C. 101 (“101”). Alice Corp. involved four patents that had been assigned to business-method art units (characterizing business-method art units as 3621-29, 3681-89, 3691-95 and those in former technology center 2700). The Court found that the claims at issue were directed to an abstract idea and did not sufficiently transform the idea to become a patentable invention.

One question is whether Alice Corp., in essence, strips patent prospects from business-method inventions. Another question is whether the analysis in Alice Corp. will invalidate patents in other areas under 101. The author thus examined all cases citing and/or including Alice Corp. and identified outcomes of analyses of compliance with 101. Further, the patents at issue were segregated based on the technology center to which the corresponding patent application had been assigned and/or whether it was assigned to a business-method art unit.

This summer, the United States Patent and Trademark Office (PTO) responded t0 Alice Corp. by issuing Preliminary Examination Instructions in view of the case, and impact on examination of business-method patent applications was essentially immediate. Using LexisNexis PatentAdvisor, data was collected for a January time period (January 13-27, 2014) and July time period (July 13-27, 2014) that identified, for each Office Action issued during the time period, whether the Action included a 101 rejection and the corresponding art unit.



USPTO Releases Patent Eligibility Guidance

Posted: Monday, Dec 15, 2014 @ 6:41 pm | Written by Gene Quinn | 12 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.



1998: Federal Circuit Says Yes to Business Methods

Posted: Friday, Dec 12, 2014 @ 1:40 pm | Written by Gene Quinn | 2 comments
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Posted in: Authors, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, Software, Technology & Innovation

This is part 4 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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Judge Giles Sutherland Rich, circa 1994.

In State Street Bank & Trust v. Signature Financial Group, the patent in question was U.S. Patent No. 5,193,056, which issued to Signature Financial Group on March 9, 1993. The ‘056 patent was generally directed to a data processing system for implementing an investment structure which was developed for use in Signature’s business as an administrator and accounting agent for mutual funds. In essence, the system, identified by the proprietary name Hub and Spoke®, facilitates a structure whereby mutual funds (Spokes) pool their assets in an investment portfolio (Hub) organized as a partnership. State Street was in talks with Signature Financial to acquire a license, and when talks broke down they brought a declaratory judgment action to have the ‘056 patent claims declared invalid.

There were several critical issues in play in State Street. First was the so-called mathematical algorithm exception to patentable subject matter, and the other was the business method exception to patentable subject matter.



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.



I Thought Banks Didn’t Like Financial Software Patents?

Posted: Sunday, Dec 7, 2014 @ 8:00 am | Written by Gene Quinn | 5 comments
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Posted in: Authors, Financial, Financial Services, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, Post Grant Procedures, Software, Technology & Innovation

Senator Chuck Schumer (D-NY) has been a vocal critic of financial service software patents.

As part of our ongoing Companies We Follow series, last week we profiled the recently issued patents granted by the United States Patent and Trademark Office to the Bank of America, as well as the recently issued patents granted to JPMorgan Chase. As you might expect, both Bank of America and JPMorgan Chase seek patents on various innovations related to financial transactions, cybersecurity and identity theft technologies, smart card technologies and smartphone applications. Not too shocking really.

What really caught my attention, however, were the patent claims that Bank of America and JPMorgan Chase are both receiving. What is particularly interesting is that these companies are receiving what can only be characterized as software patents, which further explicitly claim computer implemented business methods. It is at least a little surprising that these types of patents are still being issued after the Supreme Court’s decision in Alice v. CLS Bank. This also isn’t the first time that we’ve noticed that big banks are continuing to get software patents issued in what for most others is an extremely hostile environment for computer implemented methods, computer systems and especially for financial service business methods. Perhaps this is the luck of the draw, perhaps applicants who are not big banks are being swept up in the unprecedented scrutiny that the USPTO is secretly placing on numerous applications, or perhaps the big banks just find themselves dealing with patent examiners who unapologetically work for the Patent Granting Authority. Still, one has to wonder.

Truthfully, the fact that big banks are getting software patents on claims written explicitly to cover computer implemented methods is quite ironic. The banks were the ones who pushed for what is known as covered business method patent review (CBM), which is a variety of post grant review (PGR) that came into being in September 2011. Post grant review is only applicable to patents granted on applications examined under the first to file provisions of the America Invents Act (AIA).{1}



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.



Software Patent History III: The Federal Circuit Decides Arrhythmia Research & Alappat

Posted: Thursday, Dec 4, 2014 @ 3:30 pm | Written by Gene Quinn | No Comments »
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Posted in: Authors, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, Software, Technology & Innovation

This is part 3 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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For some time after the Supreme Court decision in Diehr, the Court of Appeals for the Federal Circuit applied what was known as the Freeman-Walter-Abele test to determine whether a computer program is patentable subject matter pursuant to 35 USC 101. The last of these cases, In re Abele, was decided by the Federal Circuit a little more than a  year after the Supreme Court issued its decision in Diehr.

Given that the Supreme Court almost never overrules its own prior decisions, then Justice Rehnquist tried to explain in Diehr that both Gottschalk v. Benson and Parker v. Flook remained good law, despite the fact that the holding in Diehr clearly set patent eligibility for software on a new path different and distinct from the path chosen by the Court in Benson and Flook. Indeed, in a recent interview Judge Richard Linn told me: ” I have great difficulty rationalizing the Supreme Court’s opinions in Flook and Diehr, and in many regards I think those decisions are irreconcilably in conflict.” Judge Linn isn’t the only one to hold that opinion. If only his panel opinion in Alice were the law of the land — but that is another story for another day.



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.