Posts Tagged: "software patents"

The USPTO Memorandum of November 2, 2016 as to Recent Subject Matter Eligibility Decisions (“USPTO Memo”) inappropriately attributes the phrase “computer-related technology” to McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed. Cir. 2016). The phrase “computer-related technology” does not appear in McRO or even in Alice Corp. Pty Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014); rather, it appears in Enfish, LLC, v. Microsoft Corp., 822 F.3d 1327 (Fed Cir. 2016) and only after Enfish appropriately cites Alice.

On Monday, March 13th, the U.S. Court of Appeals for the Federal Circuit issued a decision upholding the Patent Trial and Appeal Board’s (PTAB) finding that a patent application covering a patient health information management system is invalid under the Alice standard. The decision is a disturbing reminder that, despite recent cases in which the Federal Circuit has overturned PTAB decisions, short-sightedness in the U.S. judiciary continues to negatively impact important burgeoning sectors of innovation.

The absurd way in which important players in the U.S. patent system view the patentability of software innovations will undoubtedly harm our country’s chances of benefiting economically from the coming AI boom. Which is too bad, because that same Accenture study on AI’s economic benefits to the UK predicts that AI could add as much as $8.3 trillion to the American economy, thanks in no small part to “a strong entrepreneurial business climate and advanced infrastructure position.” But that strong entrepreneurial business climate is undercut by the weakening of patent protections for software, which makes up much of the foundation of artificial intelligence technologies.

Asking whether the industry has gone too far to eradicate weak patents misses the point entirely, and to some extent will allow those who want the patent system to continue its march off the cliff to inappropriately claim the moral high ground. Regardless of how you prefer to characterize problem patents, whether it be as weak, bad, low quality, or invalid, no one wants those problematic patents to issue or be used to harass individuals or businesses as they sometimes have been used by bad actors. But that begs the real question. In an attempt to eradicate the system from those problematic patents have things gotten out of control and, thereby caused collateral damage in an indiscriminate way to all patents, including high quality, strong patents? To that question the answer must be a resounding yes!

The § 101 rejection rate for patent applications in the e-commerce work groups approaches 100%, then drops precipitously for the remaining seven of the top ten work groups with the greatest percentage of § 101 rejections. Before Bilski, the § 101 rejection rate in the e-commerce work groups hovered around around the 30% mark, but has now tripled. The remaining work groups have also seen their § 101 rejection rates rise by 200-300%, although they make up a significantly smaller proportion of total rejections than in the e-commerce art units. While it did not surprise us that these work groups were at the very top of the list for § 101 rejections, we also wanted to know what other technologies are particularly prone to § 101 rejections.

Guidelines, set to go into effect on April 1st in China, continue to leave the window open for software and business method patents. For software patents, patent applicants will be able to claim a medium plus computer program process instead of claiming means plus function, a term which has typically been narrowly construed by SIPO examiners. As ZY Partners’ analysis notes, previously ineligible claims directed at “a computer program product” or “a machine-readable medium” will now be eligible for patent protection in China…. Given this trend towards delegitimizing the patentability of inventions within valuable growth sectors in the U.S., it’s particularly galling to see that China, often portrayed as the United States’ top economic competitor, has been moving in the opposite direction, even if only slightly. Last October, China’s State Intellectual Property Office (SIPO) released revised guidelines for its patent examiners and some were quick to note that the revised guidelines were friendlier to both software and business method patents.

JP Morgan has created revolutionary software capable of doing in seconds the same work that it would take a large team of lawyers 360,000 hours to complete. Clearly, this extraordinary software solution for engaging in tedious contract review is nothing more than an abstract idea and is not the type of thing that can be patented in America. The United States Supreme Court has put an end to these types of revolutionary innovations being patented, and if the hard working patent examiners at the United States Patent and Trademark Office make a mistake and issue a patent on such a ridiculously simple innovation that a second year engineering student could clearly have programmed over a weekend while sipping latte’s at the corner coffee shop the PTAB, some district court or the Supreme Court will step in and set the record straight.

Mathematics has long been accepted as a tool to model the physical reality. For many it is hard to grasp that math actually “does something.” The reality is that mathematics based instructions in computers generate signals that are useful and used. This type of mathematics may be called “operational mathematics.” Operational math already replaces devices that used to be made from valves and gears or from electronic components. Operational mathematics also enables new devices that were previously unimaginable.

The impact of Alice has been just what one would expect. The decisions of the USPTO examining corps, USPTO Patent Trial & Appeal Board, and lower courts have been wildly inconsistent. Far too many worthy inventions are being lost. Perhaps worse, the predictability innovators and investors in research and development require to effectively navigate the patent system has been eliminated. Change is sorely needed and overdue.

I am particularly concerned about the impact this case law has on the patent application process. Instead of focusing on novelty and clarity, examiners and applicants alike spend time struggling to make sense of Section 101 jurisprudence. That is a serious misallocation of the limited resources of both patent examiners and applicants, leading to longer examination times and less reliable patent grants. Delays in patent review and patent grants can interrupt a startup’s lifecycle, negatively influencing employment growth, sales, and subsequent innovation. This is just one of several factors lengthening patent examination, but it is one that may warrant a congressional response.

IPO supports legislation because the patent eligibility test created by the U.S. Supreme Court is difficult to apply and has yielded unpredictable results for patent owners in the courts and at the USPTO. IPO’s proposed legislative language would address these concerns by reversing the Supreme Court decisions and restoring the scope of subject matter eligibility to that intended by Congress in passing the Patent Act of 1952; defining the scope of subject matter eligibility more clearly and in a technology-neutral manner; requiring evaluation of subject matter eligibility for the invention as a whole; and simplifying the subject matter eligibility analysis for the USPTO, courts, patent applicants, patentees, practitioners, and the public by preventing any consideration of “inventive concept” and patentability requirements under sections 102, 103, and 112 in the eligibility analysis.

On Tuesday, January 31, 2017, at 2pm ET, please join Gene Quinn (IPWatchdog) for a free webinar discussion on best practices for software patents and predictions for 2017… Since May 2016, Judges Moore, Taranto, Hughes, Chen, Newman, O’Malley, Reyna, Stoll, Wallach and Plager have all sign on to decisions that found at least some software patent claims to be patent eligible. That brings the total to ten (10) judges of the Federal Circuit indisputably in favor of patent eligibility for software in at least some instances over the last eight months.

When addressing the issue of generality vs. particularity, we come across a situation where the inventors described the most crucial aspect of the invention, the classification unit, in general terms in the claim. Consequently, in the PTAB’s assessment, the representative claim did not rise above the threshold test of patentability under section 101. But much of what the PTAB seems concerned about relates to disclosure and there is nothing in the PTAB panel decision in Itagaki to suggest that the PTAB reviewed the specification to determine whether the somewhat generally described terms were given particularized meaning by the applicant. It also raises questions about how the PTAB could have properly conducted an obviousness review if the classification unit was so abstract as to be infirm from a patent eligibility point of view.

In late October, China’s State Intellectual Property Office (SIPO) released a set of guidelines for Chinese patent examiners that revises the last guidelines put in place in 2010. Although SIPO has made the revised guidelines available online in the Chinese language only, analysis of those guidelines by the European Patent Office (EPO) and others indicates that, in some important ways, the new guidelines represent a veritable inverse of the current patent examination environment seen here in the United States… China is about to become friendlier to software patents in particular and patent owners more generally by reducing the complexity of prosecution procedures and making more information publicly available. Given the large number of patent applications being filed with China’s patent office, a high percentage of which are not filed with foreign offices as well, and the growing preference for China as a patent infringement litigation venue, it’s likely that these new guidelines are further proof of the growing divide of IP regimes in the United States and China which, if left unchecked, will probably be to the detriment of the U.S. and its economic prospects in future years.

Part of the problem with the debate over “software patents” has been the near complete failure to accurately describe what these patents protect. Opponents of software patents frequently describe these patents as protecting nothing more than “mathematics” or logic. This is plainly false. Software is a valuable, real-world, technological innovation that is used in everything from vacuums to cars to computers to phones.