Posts Tagged: "software patent"

On December 8, 2017, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Inventor Holdings, LLC v. Bed Bath & Beyond, Inc. (2016-2442) that provides some useful language to practitioners dealing with patent ineligibility rejections having Alice as their basis… “Like the claims at issue in Mortgage Grader, the [claims at issue] are directed to an ‘economic arrangement’ implemented using ‘generic computer technology.’ These issues were significant, if not determinative, of the Court’s holding in Alice.”

If there was a theme that emerged in 2017 it is the necessity to have what is specifically innovative disclosed in the claims. While not a particularly new concept, there were cases in 2017 where the Federal Circuit acknowledged that a patent eligible innovation may well have been disclosed in the specification, but which was not found in the claims. With many legacy software patents the description of the technology (if one actually existed) was only in the specification while the claims were written to be quite broad. The Federal Circuit requires both a thick technical description of the innovation and why it is an improvement (see Enfish) and incorporation of what is innovative into the claims… What follows picks up where my 2016 article left off and provides summary and analysis of the notable software patent eligibility cases decided by the Federal Circuit in 2017.

In Two-Way Media Ltd v. Comcast Cable Communs., LLC, (Opinion for the court, Reyna, J.), the Federal Circuit affirmed a district court decision finding four patents owned by Two-Way Media were directed to ineligible subject matter under 35 U.S.C. § 101. Claim 1 of the ‘187 patent was representative of the ‘187 and ‘005 patents, and described a method for transmitting message packets over a communications network, like the Internet… For claims directed to judicial exceptions under § 101, a patent cannot identify a sufficient inventive concept solely in the specification and survive the Alice inquiry; the inventive concept must be found in the claims themselves in order to transform the nature of the claims into a patent-eligible application.

The Uniloc patent invalidated by the PTAB in this case is U.S. Patent No. 5490216, titled System for Software Registration and issued in February 1996. It claims a registration system for licensing execution of digital data in a use mode, the system including both local and remote licensee unique ID generating means, and a mode switching means operable on a platform which permits the use of digital data only if the locally-generated licensee unique ID matches the remotely-generated licensee unique ID. The innovation solved issues in prior art systems for software registration for software transferable by physical media which used shell programs or did not utilize information unique to the intended licensee which is distinguishable from the identification of the platform. According to data collected from Lex Machina, Uniloc’s ‘216 patent has been asserted in 65 cases filed in U.S. district court going back to September 2003.

I used to receive telephone calls, quite frequently, asking about the procedure for preparing and filing a patent application. Today, I no longer receive these calls. I suspect the main reason is that inventors are giving up an expectation that patent protection is even worthwhile. And I get it. If I were to get a call these days, I could no longer paint a rosy picture for would-be patentees… But these days, I fear the conversation would have a different tone. It might go more like this… “for a mere $2,625,000 you can disclose your most important innovation to your competitors, and they can use it and make sure that you actually have no rights to it.”

Today’s environment demands an agile approach, one that involves substantial up-front planning, followed by continuously learning from both the client and the marketplace, using a strategy that involves constructing a defensive and offensive patent portfolio from a collection of laser-focused patents, rather than a single overarching patent intended to cover the invention in one fell swoop… More concretely, the strategy that we typically follow nearly always avoids the need to appeal, and therefore avoids the pitfalls of the PTAB, as follows. The foundation is to write a solid and comprehensive patent specification, one that is intended to cover the invention both broadly and deeply, in an effort to enable as many embodiments as possible for as long into the future as possible, encompassing both the client’s and competitors’ technologies. The first patent application that we file, however, typically has relatively narrow claims for a variety of strategic reasons…

One of the great aspects of the Unitary Patent is that it follows the normal EPO procedure up to grant. And indeed, the search and the examination processes will be precisely the same as those you’ve been used to with the current EP and PCT procedures, and will be performed by the same examiners. One of the strengths of the EPO is that we allocate examiners to applications according to their technical expertise, regardless of the filing route through which applications arrive. It will only be at the end of the procedure, when the application proceeds to grant, that applicants will have to indicate if they want to have a single Unitary Patent instead of a bundle of patents for individual member states, as is the case for the European patent. So it’s extremely straightforward, cost effective, and much simpler to administer post grant than the current European patent. My impression is that many U.S. applicants already understand the logic and advantages of this very well, sometimes even a little better than European applicants, as the geographical size and the GDP of the market covered by the Unitary Patent is very similar to that of the U.S. patent.

We try to be precise and stick to CII because “software” in itself is a term which lacks precision. It can refer to a high level program, a machine level program, or it can be an executable program. But if we speak about a computer-implemented invention the core of the discussion is rather on the technology. We have a general purpose computer and we program it, and when it runs it executes the instructions and performs certain functions. So the essence of our approach is to ask what the software does. Software of course can do a variety of things, many of which can be totally out of the patentable area if they’re purely abstract or purely business oriented. But when software solves a technical problem you are definitely in the area where a patent is possible. That is the core element of our approach.

The majority determined that the patent claims drawn to a computer memory system did not cover an abstract idea and, therefore, the second step of the Alice test was an unnecessary inquiry… “Our review of the ’740 patent claims demonstrates that they are directed to an improved computer memory system, not to the abstract idea of categorical data storage,” Judge Stoll wrote. “The specification explains that multiple benefits flow from the ’740 patent’s improved memory system.”

“I think at the end of the day, patents are either valid or invalid as a legal instrument and therefore it’s not very helpful to talk about quality or ‘good’ or ‘bad,” Judge Michel said. “They’re either valid or not valid and with respect to someone practicing the technology, the patent is either infringed as properly construed or it is not infringed.”

I have always argued that software patent eligibility is a must in a country where patent rights are guaranteed by the Constitution. That is, all fields of innovation should be treated equally under the law such that one field of endeavor (e.g., pharmaceuticals or electronics) is not deemed more “patent worthy” than other fields (i.e., computer science and information technology). This is especially true when one considers how important software is to the U.S. economy… A substantial amount of U.S. commerce is software-dependent and the associated innovation in the field – when novel and non-obvious – deserves stable and predictable patent law protection!

The industry is collapsing all because no one in a black robe has the guts to define the critical term that is the core of a test that is whimsically applied in arbitrary and capricious fashion. And why? The test is whimsical, arbitrary, and capricious precisely because it is unpredictable and never repeatable. Of course, the reason it is unpredictable and never repeatable is because different judges and panel configurations apply it based on their own subjective views because no one has ever taken the time to define the key term; no one cares to even attempt to interject objectivity to what is a hopelessly subjective, unpredictable and arbitrary test.

The few CAFC cases (since Alice) that have found inventions to be subject matter eligible is certainly a welcome development. These cases indicate that the CAFC does not believe all computer-related inventions are ineligible, and they provide helpful clues about what will weigh in favor of eligibility. Unfortunately, these cases do not demarcate the boundary between eligibility and ineligibility in any predictable, meaningful way. We still do not have an acceptable working definition of “abstract” and we likely never will. In these cases, the CAFC applied a variety of different, often inconsistent, rationale for finding the inventions at issue to be subject matter eligible.

The Federal Circuit held that the claim was directed to the abstract idea of encoding and decoding image data. According to the panel, the claim recited “a method whereby a user displays images on a first display, assigns image codes to the images through an interface using a mathematical formula, and then reproduces the image based on the codes… This method reflects standard encoding and decoding, an abstract concept long utilized to transmit information.” The Federal Circuit went on to note under step one that RecogniCorp’s Claim 1 differed from the invention in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) because, unlike Enfish’s invention, Claim 1 did not recite a software method that improved the functioning of a computer but instead recited a process “for which computers are invoked merely as a tool.”

On April 13, 2017, Broadband iTV, Inc. (“BBiTV”) filed a petition for a writ of certiorari with the Supreme Court of the United States, requesting that the Court to take the case to resolve three recurring issues relating to patent-eligibility and the procedure by which courts analyze patent-eligibility… BBiTV appeals from the Federal Circuit’s Rule 36 affirmance of two summary judgment decisions in which the district court found claims of U.S. Patent No. 7,631,336, entitled “Method for converting, navigating and displaying video content uploaded from the internet to a digital TV video-on-demand platform,” to be directed to the abstract idea of “using the same hierarchical ordering based on metadata to facilitate the display and locating of video content.” Amicus briefs in support of the Petition are due by May 15, 2017.