Posts Tagged: "Alice"

“In our time together today we are going to try and take stock of the health of the American patent system,” Michel began. “It is important to remember that the patent system was founded in the Constitution… and although the world ‘right’ appears many times in the Bill of Rights, in the original Constitution the only ‘right’ mentioned is the patent right.”… Investment is being disincentivized by uncertainty created by the aforementioned three waves of changes to the system. We should be looking at the impact on the flow of money, Michel explained.

On December 15, 2016, the USPTO published three subject matter eligibility examples focusing on business method claims. The purpose of these examples is to give guidance on how claims should be analyzed using the 2014 Interim Guidance on Subject Matter Eligibility, recent Supreme Court and Federal Circuit decisions, and recent Memorandums published by the USPTO. These examples seem to indicate that the power of §101 to restrict patentability has been whittled down since Alice and that the USPTO would like to reduce the number of §101 rejections for technological claims in light of court decisions post-Alice. Below, we describe each example provided by the USPTO, explain the USPTO guidance for each example, and provide practical practice tips that practitioners can use to help reduce or overcome §101 rejections.

There can be little doubt that today the claims of the ‘703 patent would be considered to cover a patent ineligible abstract idea. In other words, had the United States Supreme Court decided Alice v. CLS Bank prior to the issuance of the ‘703 patent, Leighton and Lewin would never have received the ‘703 patent and they would not be eligible for induction into the National Inventors Hall of Fame… Obviously, a test that would render claims to a Hall of Fame patent invalid is a broken test.

A recent opinion by the Federal Circuit suggests that there will be considerable uncertainty about the respective boundaries of §§ 101 and 112 in the years ahead. In Trading Technologies Intl. Inc. v. CQG, Inc., Judge Newman wrote on behalf of a unanimous panel, following up on her concurrence in Bascom… Of particular interest is her continued endorsement of a flexible approach to § 101 and the traditional measures of patentability, such as § 112. Judge Newman wrote that the “threshold level of eligibility is often usefully explored by way of the substantive statutory criteria of patentability,” and that this approach is in harmony with the Supreme Court’s reasoning in in Alice.

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.

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.

Based on how often the Supreme Court reverses the Federal Circuit, what percentage of the Court’s Rule 36 decisions are wrong? Perhaps 90% of them? Then again it is impossible to really know given how Rule 36 is an impenetrable black box that realistically prevents appeals, insulating the Federal Circuit from any scrutiny from above… The notion that the facts of the case are what they are and will result in the same results in any district court goes right out the window if you look at what passes for “patent justice” in America. Therefore, the shocking lack of consistency court-to-court and judge-to-judge would certainly argue in favor of more, and better, guidance from the Federal Circuit. But use of Rule 36 and the all too familiar one-word judgment that simply says – “Affirmed” – prevents any guidance, let alone meaningful guidance.

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.

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.

In many of the decisions, the examiners and appellants had an opportunity to make arguments based on Alice before the PTAB reached a decision. Yet, the outlook has become only more grim for appellants who are hoping that the PTAB will overturn a § 101 rejection. As indicated above, the reversal rate for a § 101 rejection in December 2016 based on Alice was less than 9%. Equally worrying for potential appellants is that some decisions introduced a § 101 rejection even when prior art rejections were reversed. The PTAB seems to have stopped the practice of urging examiners to review the claims for compliance under § 101 in light of Alice, and, instead, has become more active in introducing § 101 rejections on their own.

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.

In what can be described only as an utterly ridiculous, intellectually insulting, and idiotic decision, the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) has done the truly absurd. In Ex parte Hiroyuki Itagaki the PTAB has ruled a magnetic resonance imaging (MRI) machine to be patent ineligible because it is an abstract idea, citing the United States Supreme Court’s decision in Alice v. CLS Bank for support.

The Alice/Mayo framework is the decisional approach adopted by the United States Supreme Court for determining whether a patent claim exhibits, such as software patent claims, embody patent eligible subject matter… Over the last six months the Federal Circuit has provided a great deal of clarity, with 9 judges (Judges Moore, Taranto, Hughes, Chen, Newman, O’Malley, Reyna, Stoll, and Plager) signing on to decisions that found software patent claims to be patent eligible. What follows is a a summary of the significant developments over the last six months.

The ’510, ‘984, and ‘797 patents were each held eligible for similar reasons. Again, the court found that even if the claims were directed to an abstract idea, they would be eligible under step two of the Alice framework. The Court again relied on the unique and unconventional distributed architecture found in the specification and construed into the claim in the previous proceeding. This architecture allowed for load distribution – a technological and unconventional solution to a technological problem. While the ‘984 claims contained generic components and functions, the overall ordered combination of the limitations were unconventional and solved the technological problem.

Join us on Thursday, November 3, 2016 at 2pm ET for a discussion on drafting patent applications to overcome Alice, with JiNan Glasgow of Neopatents and Gene Quinn of IPWatchdog. In addition to taking as many of your questions as possible we will address the following: (1) Brief overview of Alice, Enfish, TLI Communications, BASCOM, McRo and FairWarning IP. (2) What these most recent Federal Circuit cases teach about drafting software patents. (3) How to cope with being unexpectedly assigned to an Art Unit.