Posts Tagged: "patentable subject matter"

I am sure that the justices of the Supreme Court did not anticipate the confusion they created when they issued their controversial decision in Alice Corporation v. CLS Bank in 2014. That case effectively upended well-established precedence when the Court unanimously held that a computer-implemented scheme for mitigating settlement risk was not patent eligible subject matter because the claims were drawn to an abstract idea, and that merely requiring generic computer implementation fails to transform the claims to eligible subject matter. The Court itself said their holding was to be narrowly construed, but in providing a vague, two-step test to determine whether something is patent eligible, they unleashed a world of hurt on some of our domestic industries seeking patents in cutting-edge technologies. The application of the Alice test to some of our health-related industries is having disastrous effects. On February 6, 2019, in a split decision, the United States Court of Appeals for the Federal Circuit (CAFC) found in Athena Diagnostics v. Mayo Collaborative Services that diagnostic methods are not patent subject matter eligible unless they embody a separate technical improvement beyond the correlation of certain antibodies in bodily fluids to particular diseases. In a footnote, the majority lamented that they felt compelled by Supreme Court precedence to render their decision, but recognized that protection of diagnostic methods would be for good for society. The Athena case does not portend well for the CAFC adoption of the recent USPTO guidance on Section 101. The courts will eventually be able to either put their imprimatur on those guidelines or discard them. The sooner that is done, the better.

USPTO Director Andrei Iancu’s 2019 Revised Patent Subject Matter Eligibility Guidance promises to virtually eliminate the greatest patent problem of our time. If implemented properly by the examiners and Patent Trial and Appeal Board (PTAB) judges, the guidance could solve the 101 mayhem and the incredible harm that it has done to inventors of computer implemented inventions. The guidance will also increase the value of patents, since strategic infringers will not be able to use the PTAB as the killing ground for patents using subject matter eligibility. Director Iancu needs us to support him with positive public comments as justification for his guidance and, very importantly, to suggest improvements to his guidance for its final/future version(s) and its implementation. Please send the following text with any of your edits to [email protected] by the March 8, 2019 deadline.

The Licensing Executives Society (LES) 2017 High Tech Deal Term & Royalty Rate Survey is a milestone event for at least three reasons. First, it was the third survey since the inaugural survey in 2011, and the three surveys fully covered the time period of a decade—from 2008 to 2017. Second, the 2017 Survey marked the fifth anniversary of Inter Partes Review (IPR) procedure and the third anniversary of the Supreme Court’s ruling in Alice v. CLS Bank. Third, at the time of the Survey, a new USPTO Director was nominated by the Trump Administration, bringing a fresh glut of uncertainties, anxieties, and hopes to the already jittery IP market.

Last week, Senator Chris Coons (D-DE) and Senator Thom Tillis (R-NC)—respectively, Ranking Member and Chair of the Senate Judiciary Committee’s Subcommittee on Intellectual Property, which was resurrected on February 7 for the first time since 2007—met with Congressman Doug Collins (R-GA) and others for their second bipartisan meeting in three months in search of a possible legislative solution to the patent eligibility crisis facing biotechnology, medical diagnostics and software related innovations. The same players met in December to begin discussing the issue, and stakeholders are now being told that they should join the conversation sooner rather than later if they want their voices to be heard. With the Senate IP Subcommittee back up and running and the seeming momentum on fixing patent eligibility law, it’s worth taking a look at the Subcommittee’s leadership and what their collective experience could mean for substantive change.

Since having been sworn in as the new director of the U.S. Patent and Trademark Office (USPTO) in February 2018, Andrei Iancu has led the charge to improve predictability of patent-eligible subject matter. In his speech at the Intellectual Property Owners’ (IPO) Association’s annual meeting in Chicago in late September 2018, the director told IPO’s membership that the USPTO is “contemplating revised guidance to help categorize the exceptions [to patent eligibility]—and indeed to name them—and instruct examiners on how to apply them.” Moreover, Director Iancu had created a new post that coordinates between the Patent Trial and Appeal Board (PTAB) of the USPTO and the examining corps, and he installed former PTAB Chief Judge David Ruschke to that post in August 2018. True to his word, on January 7, 2019, Director Iancu issued “2019 Revised Patent Subject Matter Eligibility Guidance,” which explains how U.S. Patent Examiners should analyze patent-eligibility questions under the judicial exception to 35 U.S.C. § 101. See 84 Fed. Reg. 50-57 (Revised Guidance). In less than two weeks since the Revised Guidance, the PTAB issued two decisions reversing examiners’ 35 USC § 101 rejections based on the Revised Guidance—ex parte Rockwell, Appeal No. 2018-004973, Jan. 16, 2019; and ex parte Fanaru, Appeal No. 2017-002898, Jan. 22, 2019.

Here we go again! Another patent whose claims have been invalidated at the Federal Circuit—predictably, another medical diagnostic patent. Athena Diagnostics v. Mayo Collaborative (Fed. Cir. Feb. 6, 2019). This is getting old, tired and fundamentally ridiculous. The statute, which is all of one-sentence long, specifically lists discoveries as patent eligible. So why are discoveries being declared patent ineligible? To the extent these decisions are mandated by the Supreme Court, they directly contradict the easy to understand and very direct language of the statute. The Federal Circuit is wrong, period. Perhaps they are so close to these cases and trying so hard to do what they think is right that they have lost perspective, but these rulings are fundamentally saying that discoveries are not patent eligible. We are told repeatedly that they are mandated by Supreme Court precedent. Obviously, that cannot be correct. The statute says: “Whoever invents or discovers… may obtain a patent…” Clearly, Congress wants discoveries to be patented, and in our system of governance, Congress has supremacy over the Supreme Court with respect to setting the law unless the law is unconstitutional. 35 U.S.C. 101 has never been declared unconstitutional, so discoveries must be patent eligible, period. It is time to face the facts—the Supreme Court has considered only bad cases, with bad facts, where there was really no innovation presented in the claims, or even in the patent application as a whole. These decisions have absolutely no meaning or proper application with respect to any inventions, let alone inventions of monumental complexity such as true artificial intelligence, autonomous vehicles, or new medical diagnostics that allow risk-free testing of common ailments, where previously existing tests required potentially catastrophic risk.

Patent professionals encounter many different personality types working with their colleagues and inventors. On one end, there are those who do great work but lack confidence in their abilities, and on the other there are those who overestimate their abilities and lack the skills to do an efficient job. Those who are competent, but lack confidence, often believe others are smarter and more capable then they are. This can be particularly problematic when that individual is an engineer or scientist hired by a company to invent, or even an independent inventor who toils for years thinking that what they are doing just isn’t good enough. Building confidence in those who have creative abilities seems like a difficult task, but it can be even more challenging to work with someone who believes they are great at what they do when they clearly lack abilities, or what they do create is a modest improvement, or even trivial advance that the law is unlikely to recognize as a patentable invention. These individuals typically are completely unaware that they lack the necessary skills, they overestimate their contributions, and often become extremely defensive or even angry when others do not seem to appreciate what they consider to be their own brilliance. This phenomenon is not uncommon and has even been given a name by two psychologists who studied how individuals at different ends of the spectrum see themselves and the value of their contributions—the Dunning-Kruger Effect. The Dunning–Kruger Effect is based on the principle that, in order to know you are bad at something you must have at least a moderate understanding of it. Thus, when an individual lacks ability in a certain area, they cannot recognize that they are lacking. That is, in order to recognize their deficiencies, they must have at least a moderate understanding of the subject.

The Global Innovation Policy Center (GIPC) of the U.S. Chamber of Commerce issued its annual International IP Index ranking the intellectual property environments in 50 of the most important economies. The 2018 edition saw the United States rank #1 overall for intellectual property, as the top jurisdiction in the world broadly speaking for intellectual property protection. The 2019 edition, released February 7, 2019, again saw the U.S. maintain its dominance as the top jurisdiction in the world for intellectual property protection as a whole. In 2018, however, the U.S. sank to twelfth place in the Chamber rankings relative to patent protections. In 2019, the U.S. rose to a tie for second place. This is certainly welcome news, but it is worth mentioning that the historic lead the U.S. had as the top patent jurisdiction in the world since the early 1980s has largely been forfeited over the last decade. There is great optimism among patent owners and innovators that things are changing and will continue to improve at the USPTO under Director Iancu’s guidance. The question that remains for patent industry observers is whether the Federal Circuit will ultimately agree with what Director Iancu is doing in order to implement predictability.

From a conceptual standpoint, it would seem logical to assume that writing text to describe a particular invention ought to be easy for the inventor of that invention. Unfortunately, it isn’t that simple. While inventors are very good at inventing, they tend to be less good at many of the adjacent and necessary tasks along the road from invention to market success. Indeed, while an inventor undoubtedly knows the invention better than anyone else, it can be enormously difficult for inventors to describe their own inventions. The inventor of a new and useful invention is always in the best position to describe the invention. The problem lies with the reality that most inventors simply don’t understand what needs to be described in order to satisfy the U.S. patentability requirements. And, sadly, when inventors forgo professional assistance, they all too often wind up focusing their entire description of their inventions on how their new device or gadget will be used at the expense of describing the parts and pieces that make up the invention. This is an enormous mistake, and one from which there is often no recovery.

The cost of obtaining a U.S. patent has not significantly changed for the past 10 years. This remarkable stability is confirmed by the AIPLA Economic Survey, our own fees, and our general knowledge of the market. The major costs for obtaining a U.S. patent include the drafting fee, the cost of responding to USPTO office actions and the USPTO fees. The first two fees have not increased in over 10 years for many firms and the government fees have increased but remain relatively low compared to the other fees. With respect to the price of issued patents, the 2018 IAM Benchmarking Survey points to a bear market for U.S. patents, which are “cheaper” year after year. A fall in prices is reported, with 24% of corporate respondents stating that patents are cheaper than a year ago; the previous year’s survey had 36% reporting a fall in prices. Such relatively stable cost and low price are disharmonious with the fact that a U.S. patent covers the largest market in the world—and a growing market. Despite a slight dip in 2009, the U.S. GDP has grown steadily for the past 20 years. Even if the recent volatility in the stock market is a sign of a difficult 2019, the long-term positive trend is likely to continue.

During the interview with Technology Center Director Tariq Hafiz we discussed whether it is realistic to expect patent examiners to perform a complete Section 101 analysis, including comparing a claimed invention to concepts that have been found patentable and not patentable under Section 101 in Federal Circuit and Supreme Court decisions. Unfortunately, this has often involved examiners pigeonholing claims at issue into completely unrelated court decisions that found claims to be directed to an abstract idea. In the new guidance, the USPTO plainly states that the approach of examiners comparing claims to a growing number of court decisions involving Section 101 has “become impractical.”

In Part I of my recent interview with IBM, I spoke with Mark Ringes, IBM Vice President and Assistant General Counsel, and Manny Schecter, Chief Patent Counsel, about the company’s commitment to innovation and approach to patenting. Our conversation took place at the IBM offices on Madison Avenue in New York City and touched on topics ranging from Section 101 to startups to the USPTO. Below, the conversation continues with an in-depth discussion of Section 101 law, software patents, and how the Federal Circuit and Supreme Court have contributed to the situation in which we find ourselves today.

For almost ten years, U.S. patent law has experienced extraordinary confusion and uncertainty about what types of inventions and discoveries are patent eligible. The U.S. system changed from offering strong protection for novel and nonobvious inventions to questioning whether groundbreaking technologies are even the type the Founders thought would promote the progress of the “Useful Arts.” But recent developments, including the USPTO’s 2019 Revised Patent Subject Matter Eligibility Guidance (Section 101 Guidance), suggest that winds of change may clear the fog and bring back some clarity to U.S. patent law.

Selling an idea and waiting for lottery-like winnings to arrive at your doorstep seems to be the American dream. It is certainly the dream of every inventor, and it is a dream fanned by late night television commercials that suggest all you need is an idea companies will be falling over themselves to pay you for the rest of your natural life for the right to use it.

It all sounds too good to be true! Well, that’s because—in its most simple terms—it is. That doesn’t mean there isn’t a kernel of truth to the story. There’s just a little more to it than suggested by those late night commercials.

Let’s begin with a simple question: Can you sell your idea for profit? The short answer is yes, absolutely. And, if you come up with the right idea, you can make a very handsome profit. But there is a bit of a catch (or problem really). The problem (or catch) has to do with the definition of what qualifies as an idea worth paying for and what qualifies as something too vague to be worth anything.

Several weeks ago, the Court of Appeals for the Federal Circuit issued a nonprecedential decision in Glasswall Solutions Limited v. Clearswift Ltd., affirming a district court’s findings that claims from two patents that were asserted in an infringement case filed by Glasswall were directed to unpatentable subject matter under 35 U.S.C. § 101… The Federal Circuit found that testimony offered by an expert witness for Glasswall didn’t preclude a dismissal on the pleadings as the alleged factual assertions in that testimony weren’t actually factual in nature but, rather, were conclusory legal arguments the district court wasn’t bound to accept as true.