USPTO to Issue new 101 Guidance Today!

April 19th, 2018

Very much looking forward to the new guidance on 101 from the USPTO.  I am very encouraged that the USPTO is going to take a leadership role in leading our country out of the 101 “Alice in Wonderland” era.  Software 101 jurisprudence is probably the most absurdly vague, inscrutable and unpredictable body of law in the entirety of the US legal system.  Worse yet, the weakening of the patent system has done absolutely nothing to help start ups.  On the contrary, it has most likely accelerated the decline of tech start-ups.  Ultimately, that can’t be good news for the U.S.

So, let’s hope the USPTO can help the U.S. put the Section 101 chaos of the last few years behind us once and for all.

Ex parte Bhogal and Ex parte Hoff: PTAB raises burden on USPTO to justify 101 rejections

March 23rd, 2018

Patent applicants finding themselves in art unit 3600 are finding glimmers of hope at the PTAB. In two recent decisions, the PTAB reversed the Examiners’ Alice patent eligibility rejections. In both cases, the PTAB panel cited BASCOM[1] and found the claims at issue to amount to significantly more than an abstract idea when the claims were considered as a whole.

In Ex parte Bhogal,[2] the claims at issue were directed to rendering objects in order based on bid values. The Panel deferred analysis of the first step of the Alice inquiry and focused on analyzing whether the claims amounted to significantly more than an abstract idea under step two. The Panel cited to BASCOM and determined that features of the claims “that ensure a first object is rendered before a second object is rendered by accounting for the rendering time of the first object and accordingly adjusting when rendering of the second object will begin” amounted to significantly more than an abstract idea.[3] The Panel reasoned that while the claim included well-know, routine, or conventional elements, the Examiner had failed to provide specificity regarding how the claimed manner of rendering order prioritization is well-understood or routine.[4]

In Ex parte Hoff,[5] the claims at issue were directed to a link-based interaction and structure for customer relationship management. The Panel analyzed the claims under step two of the Alice inquiry and found the claims as a whole amounted to significantly more than an abstract idea. The Panel likened the claims at issue to the claims at issue in DDR Holdings and found that, rather than merely reciting performance of a business practice from the pre-Internet world, the claims were rooted in computer technology to overcome a problem specifically arising in computer networks.[6] The panel identified that features recited in the claims such as including a link in an activity report to move the claims beyond an abstract idea.[7] The Panel reiterated that BASCOM requires examiners to go beyond identifying each element of a claim is well-know, routine, or conventional in the search for an inventive concept.[8]

While these two PTAB decisions alone do not make a trend, there is hope that the PTAB will encourage more examiners to find patentable subject matter and when they don’t, include additional analysis and reasoning to sustain an Alice rejection.

My thanks to Eric Bachinski from Schwegman, Lundberg & Woessner, P.A., for this analysis and post.

[1] BASCOM Glob. Internet. Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016).

[2] Ex parte Bhogal, (PTAB Mar. 19, 2018), https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016008742-03-15-2018-1.

[3] Id. at p. 6.

[4] Id.

[5] Ex parte Hoff, (PTAB Mar. 16, 2018). https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016002219-03-14-2018-1.

[6] Id. at p. 9.

[7] Id. at pp. 9 & 10.

[8] Id. p. 10.

China on course to eventually pass U.S. in innovation?

November 21st, 2017

Another article on the alarming decline of start-ups in the U.S., the rise of innovation in China, and the unfortunate self-inflicted degradation of the U.S. patent system’s ability to support innovative new companies.   The U.S. patent system is now tied for 10th place in the world, with Hungary.  As the author of the below article points out, the U.S. should stop worrying about China, and start worrying about improving the environment for start-ups in the U.S.

https://www.wsj.com/articles/fear-american-complacency-not-china-1511216055

Start Up Economy in Bad Need of a Patent System Fix

November 19th, 2017

The URL below points to an important opinion piece by James Glassman on the importance of the patent system to start ups, and why it needs to be fixed as a top economic priority. All the tax cuts in the world are not going to help jump start accelerated job growth if our entrepreneurs can’t afford to protect their innovations, which is a sad reality of today’s patent system.

http://thehill.com/opinion/technology/360963-a-simple-way-to-make-america-great-is-fixing-our-patent-system#.WhDcArmEpa8.twitter

Smart Sys v. Chicago Transit: One more sorry decision from the Federal Circuit

October 18th, 2017

The Federal Circuit in Smart Sys v. Chicago Transit decision ( http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/16-1233.Opinion.10-13-2017.1.PDF), again has demonstrated the need to buttress software/process claims with at least some concrete elements.

In this case, the Federal Circuit found the claims were directed to an abstract idea, stating that the claims in issue “are not directed to a new type of bankcard, turnstile, or database, nor do the claims provide a method for processing data that improves existing technological processes.”   Rather, the court found the claims are directed to the collection, storage, and recognition of data, which constitutes an abstract idea.

Claim 14, which the court determined was representative, recites:

A method for validating entry into a first transit system using a bankcard terminal, the method comprising:

downloading, from a processing system associated with a set of transit systems including the first transit system, a set of bankcard records comprising, for each bankcard record in the set, an identifier of a bankcard previously registered with the processing system, and wherein the set of bankcard records identifies bankcards from a plurality of issuers;

receiving, from a bankcard reader, bankcard data comprising data from a bankcard currently presented by a holder of the bankcard, wherein the bankcard comprises one of a credit card and a debit card;

determining an identifier based on at least part of the bankcard data from the currently presented bankcard;

determining whether the currently presented bankcard is contained in the set of bankcard records;

verifying the currently presented bankcard with a bankcard verification system, if the bankcard was not contained in the set of bankcard records; and

denying access, if the act of verifying the currently presented bankcard with the bankcard verification system results in a determination of an invalid bankcard.

Arguably, the first two steps are passively receiving data.  The third step is arguably so high-level that it could be deemed abstract under various theories (e.g., mental steps, humanly performable with pen and paper, conventional computer, or well-known economic activity).  The fourth step could arguably be cast as a yes/no decision that falls into abstractness on similar grounds.  The fifth and sixth steps are more active, but are recited at such a high-level as to sound non-technical.  Had these claims been presented from the perspective of explicitly reading a bankcard using a on-site device, and controlling physical access to a transit system, through for example a turnstile, it is less likely that the claims would have been dismissed as claiming an abstract idea.  

On the other hand, it would be much preferred if inventions such as this, that provide a very practical solution to a big technical problem, did not have to meet a standard of utility and eligibility that exceeds other technologies.

Thanks to Joe Wang of Schwegman, Lundberg & Woessner, P.A., for this analysis.

 

Is Economic Growth Lower Due to Fewer Start-Ups?

September 21st, 2017

Interesting NY Times story about the reduced number of start-ups possibly being a drag on economic growth, or put another way, the lower number of start-ups corresponds to lower economic growth rates.   Here is link to story:  https://www.nytimes.com/2017/09/20/business/economy/startup-business.html?smid=tw-share

What I find interesting is that just a few years ago, patent academics in the US (some of which admit to being funded by a large US tech company) were blaming trolls for inhibiting start-up activity, and hobbling economic growth for giant mega-corporations.  The NY Times article suggests a very different reason for that:  large corporates have so much market power it is difficult for start-ups to get enough oxygen to survive.  Of course, a start-up with a successful product can at least get a measure of countervailing market power from its patent portfolio.  That is, if it can get past Section 101 subject matter eligibility challenges, and avoid having its patents thrown into daisy-chained IPR challenges.   Its understanding that we needed a solution to trolls, but it should not come at the expense of start-ups activity, without which our tech industry cannot thrive.

So, you are telling me there is a chance? PTAB Finds Anti-Fraud Idea Patentable

September 20th, 2017

The PTAB shows us a little glimmer of the return of sanity to Section 101, with this decision that finds a claim to a credit card transaction verification algorithm patentable.  See Ex parte PATRICK FAITH and AYMAN HAMMAD

Here is one of the claims found 101 compliant:

9. A method for conducting a transaction, comprising:

generating, by a portable consumer device, a verification value in response to a transaction involving an access device;

sending, by the portable consumer device, the verification value and a portion of a first dynamic data element to the access device, the portion of the first dynamic data element including data included in a fixed position of the first dynamic data element, the verification value being different from the portion of the first dynamic data element; and

communicating, by the access device, the verification value and the portion of the first dynamic data element to a service provider computer;

wherein the service provider computer determines a plurality of candidate dynamic data elements using the portion of the first dynamic data element in response to determining that the verification value does not match a second verification value independently generated by the service provider computer, determines a plurality of candidate verification values from the plurality of candidate dynamic data elements, and determines whether the verification value matches any of the plurality of candidate verification values;

wherein, each of the plurality of candidate verification values is unique to a corresponding candidate dynamic data element of the plurality of candidate dynamic data elements; and

wherein the transaction is thereafter authenticated when the verification value matches any of the plurality of candidate verification values.

A Historical Review of the “Golden Age” of the Patent System in the U.S.

September 20th, 2017

For an excellent review of the history of the patent system over the last several decades, check out Steve Kunin’s PowerPoint presentation:

The Decline of the Golden Age of the Patent System in the U.S.: An Historical Retrospective 1983-Date

Steve was one of the USPTO’s best patent scholars and policy champions during the “golden age”, and now is an outstanding patent lawyer at the Oblon firm.

 

Former Deputy Under Secretary of Commerce for Intellectual Property Says US now “into anti-patent territory”

September 17th, 2017

In a telling article recently published in IP Watchdog, Russell Slifer, former Deputy Under Secretary of Commerce for Intellectual Property & Deputy Director of the United States Patent and Trademark Office, and a Principal at Schwegman Lundberg & Woessner, asserts that a combination of court decisions and legislation has unnecessarily moved the U.S. into the anti-patent territory.   Below is the link to the article on IP Watchdog:

Five Years after the AIA Created the PTAB

District Court: Network Gaming Patent Claims Not Invalid Under 35 U.S.C. § 101

August 31st, 2017

Network Gaming Patent Claims Not Invalid Under 35 U.S.C. § 101

The court denied defendant’s motion to dismiss on the ground that plaintiff’s network gaming patents encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. “Prior communication techniques interconnected all participants using point-to-point connections, and thus, did not ‘scale well’ as the number of participants grew. The Broadcast Claims are directed to an innovative network structure for the distribution of data as the number of participants in a computer network is scaled. . . . A non-complete, m-regular network is a network where each node is connected to the same number of other nodes, or ‘m’ number of other nodes, and where each node is not connected to all other nodes. . . . Defendants argue that the Broadcast Claims are analogous to situations such as the schoolyard game of ‘telephone’. . . . Defendants’ analogies do not present the same communication scaling issues as those that arise in computer networks. Defendants gloss over the claim requirement of a non-complete, m-regular network that is implemented on an application level. The claims require a specific and apparently innovative structure of message-forwarding, which none of Defendants’ analogies are known to employ.”

Acceleration Bay LLC v. Activision Blizzard, Inc., 1-16-cv-00453 (DED August 29, 2017, Order) (Andrews, USDJ)

This post was prepared by Mark Stignani, Esq., of Schwegman, Lundberg & Woessner, P.A.