BARRIER TO BUSINESS PATENTS SOFTENING IN CHINA

November 7th, 2016

On October 27, 2016, the State Intellectual Property Office (SIPO) published a Draft of Revisions to the Patent Examination Guidelines that would appear to reduce the barrier to software and business method patents in China. The draft has been published for public consultation and comments can be submitted by 27th November 2016.

 Article 25(2) of the Patent Law of the People’s Republic of China states that patent rights shall not be granted for rules and methods for intellectual activities. This section of Article 25 is often used as a basis for rejecting computer implemented business method patents.

 The proposed amended guidelines provide two paragraphs of relevance to software and business method patents.

 Claims related to business methods that contain both business rules and methods and technical characteristics, shall not be excluded from the possibilities of obtaining patent rights be Article 25 of the Patent Law.”

 In the second line of Part II, chapter IX, section 5.2, paragraph 1, the third sentence of the Patent Examination Guidelines are amended from, “and describe in detail which parts of the computer program are to be performed and how to perform them” to provide that “The components may not only include hardware, but may also include programs.”

 The first paragraph would appear to provide clear guidance to examiners that so long as the claims include technical features then the claims should not be rejected under Article 25(2) as a mere rule or method for intellectual activity. This appears to set a very low standard for allowable subject matter, particularly when compared to the US Alice I standard.

 The second paragraph appears to strengthen the applicants position for software inventions by allowing the software components to be considered equally to hardware components.

 When these two paragraphs are considered together in light of the current practice of SIPO, it would appear that the already lenient position of SIPO to patent eligible software and business methods is likely to move even further in favour of applicants. Companies generating software and business method inventions should therefore consider grasping the opportunities available to them in China.

Thanks to John Collins, Schwegman, Lundberg & Woessner, P.A.

USPTO issues new guidance on 101

November 2nd, 2016

USPTO issued new guidance on recent Federal Circuit decisions involving patent eligible subject matter under section 101.

The memo is available on USPTO.gov.

Avoid oversimplifying the claims – McRO

The new guidance discusses the McRO and BASCOM decisions. Regarding McRO, the guidance emphasizes not overgeneralizing the claims and considering whether the subject matter allows a computer to perform a function not previously performable by a computer. In reference to McRO, the guidance also highlights use of the specification to interpret the claims and whether they solve a technical problem, which may be indicative of the claims not being directed to an abstract idea.

Consider the combination – BASCOM

The new guidance encourages examiners to consider claim elements in combination, as well as individually, when determining whether the claim as a whole amounts to significantly more. In BASCOM the court found that the individual elements were generic computer, network and Internet components, but found the combination amounted to significantly more.

Preemption – more to come…

The update includes a short discussion of “preemption” as potential additional evidence indicative of whether the claims are directed to an abstract idea. However, the update stops short of providing any definitive guidance, but does say guidance on this point is forthcoming.

Finally, the update suggests use of non-predential decisions (e.g., SmartGene and Cyberfone) should be limited only to cases that closely match the facts in those decisions.

My thanks to Greg Stark for this post.

More good news for software patents: Amdocs (Israel) Limited v. Opnet Telecom, Inc., 2015-1180, Fed. Cir. (November 1, 2016)

November 1st, 2016

In a spate of recent decisions, the Federal Circuit seems to be loosening the reins on 101 software subject matter disqualifications.  In Amdocs, the Federal Circuit considered whether the district court was in error when it found, on the pleadings, that Amdocs claims were invalid as directed towards and abstract idea.[1] The Federal Circuit restated the Alice/Mayo two-part framework for determining patent eligibility under § 101.[2] The court noted that there can be overlap in the determination and there is no “single, succinct, usable definition or test” that informs whether a detailed analysis should be completed under step-one or step-two of the Alice/Mayo framework.[3] The court began its analysis by accepting, for the sake of argument, that the district court’s identification of the abstract idea at issue was correct.[4]

Representative claim:

  1. A computer program product embodied on a computer readable storage medium for processing network accounting information comprising:

computer code for receiving from a first source a first network accounting record;

computer code for correlating the first network accounting record with accounting information available from a second source; and

computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record.

(’065 patent at 16:4–14.)

In analyzing the claims, the court considered claims found to be ineligible in Digitech, Content Extraction, and In re TLI as well as claims found to be eligible in DDR Holdings and BASCOM.[5] The court found the claims to be more like the claims at issue in DDR Holdings and BASCOM because, even though the claims arguably involved generic computer components, the claims, as a whole, represented an unconventional technical solution to a technical problem.[6] The court leaned on the claims’ enhancement element and recitation of a distributed architecture, as described in the claims and written description, to determine that the claims represented an unconventional technical solution narrowly tailored to address a technological problem specific to computer networks.[7] Thus, even if the claims were directed to an abstract idea, the court found that the claims amount to significantly more than an abstract idea.

The Federal Circuit appears to be increasingly using the written description to interpret the claims as part of the analysis under § 101. In BASCOM and Amdocs, the court used the specification as evidence of the unconventional nature of the solution presented in the claims. These decisions appear to provide additional support for including a complete description of the technical problem and solution in the specification if § 101 may be a concern. In addition, providing additional structural elements, even if they are generic, may help in an eligibility determination if the arrangement of the elements represents a unique approach that is beneficial over the art.

One major take away from this case is that this panel of the CAFC clearly believes software is patent eligible subject matter.  At least some of the representative claims discussed (e.g., claim 1 of the ‘065 patent, page 20) is a computer readable medium claim reciting computer code for performing a series of operations.  This is very welcome after comments in recent cases from certain judges suggesting that software should be per se unpatentable.

 In fact, the eligibility analysis at least partially relies on the fact that the claims recite “computer code for” doing something specific (see page 22).  Of course, this same section includes an arguably dubious claim construction reading relatively significant additional limitations into the facially broad claims.  The claim construction aspect, is where the majority relies heavily on the specification to interpret the technical nature of the claims.  Without the majority digging into the specification to determine the nature of the invention being claimed, the representative claim appears far too broad to survive any recent district court or PTAB eligibility analysis.

 The majority opinion continues by contrasting the interpreted representative claim against ineligible subject matter:

In contrast to the claims in Digitech, the majority finds “claim 1 of the ‘065 patent is tied to a specific structure of various components (network devices, gatherers, ISMs, a central event manager, a central database, a user interface server, and terminals or clients).”  Please note, NONE of the structure recited by the majority is literally recited in the representative claim.

In contrast to the claims in Content Extraction, the majority finds “claim 1 of the ‘065 patent depends upon a specific enhancing limitation that necessarily incorporates the invention’s distributed architecture–an architecture providing a technological solution to a technological problem.”  Again, the majorities distinction over prior precedent relies entirely on a very favorable construction of the claim language (the representative claim merely recites “computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record,” with no additional recitations to characterize what “enhance” means).

The majority then favorably compares the representative claim to DDR Holdings and BASCOM:

“[C]laim 1 solves a technological problem (massive data flows requiring huge databases) akin to the problem in DDR Holdings (conventional Internet hyperlink protocol preventing websites from retaining visitors). … Claim “1 involves some arguably conventional components (e.g., gatherers), but the claim also involves limitations that when considered individually and as an ordered combination recite an inventive concept through the system’s distributed architecture.”  Remember, the representative claim is a computer-readable medium claim correctly drafted from the perspective of a single machine.  Accordingly, it is unclear how the claim involves a distributed architecture.

 Similar to BASCOM, “the benefits of the ‘065 patent’s claim 1 are possible because of the distributed, remote enhancement that produced an unconventional result–reduced data flows and the possibility of smaller databases.”  This entire line of argument from the majority can only be supported through heavily interpreting the claims in light of the specification.

 While the majorities analysis of the ‘065 patent is the best example, the eligibility analysis of all four of the patents at issue seems to rely very heavily on a strong interpretation of the claim in light of the specification.  Initially, it was surprising that Judge Reyna dissented in this case, after writing a very favorable eligibility decision in MCRO, which also used some interpretation of the claims in light of the specification in support of eligibility.  However, the majority in this decision goes far beyond the MCRO decision in use of the specification and claim construction to support eligibility.

 This AMDOCS decision is useful in reinforcing the importance of clearly defining a technical solution to a technical problem within the specification as well as providing some good sound bites for prosecution.  However, I would not expect this decision to represent a shift in eligibility analysis within the courts or the USPTO, this case is likely to be an outlier at least for now.  I think most panels of the CAFC and PTAB are currently likely to agree with the dissenting opinion that the specification may disclose a network monitoring system eligible for patenting, but that the claims are directed at nothing more than abstract ideas.  Of course, we can hope that this will represent a movement towards interpreting the claims in light of the specification to determine eligibility.

[1] Amdocs (Israel) Limited v. Opnet Telecom, Inc., 2015-1180, pp. 6 & 7, (Fed. Cir. November 1, 2016).

[2] Id. at pp. 7 & 8.

[3] Id. at pp. 8 & 9.

[4] Id. at p. 34.

[5] Id. at pp. 12–19.

[6] Id. at pp. 22 & 23.

[7] Id. at p. 24.

My thanks to Eric Bachinski and Greg Stark of Schwegman, Lundberg & Woessner, P.A., for this posting.

Method Requiring Physical Action not Claiming an Abstract Idea

October 27th, 2016

Green Mountain Glass (Green Mountain) filed a patent infringement lawsuit of patent 6,230,521 against Saint-Gobain Containers, Inc., d/b/a Verallia North America, known as Ardagh Glass Inc. (“Ardagh”). The court denied a summary motion filed by Ardagh, finding that the claims of ’521 patent were not directed towards an abstract idea. In doing so, the court made a distinction between claims that could be performed mentally and those requiring physical involvement. The court explains:

[Claim 1 includes] the acts of “selecting virgin glass,” “determining percentages of at least said selected components of said mixed color glass cullet,” and “creating recycled glass products from said calculated composition” are not steps that are typically considered abstract. . . . Instead, they recite steps grounded in physical action. For example, the glass-maker must select the raw materials that will be used from a list of options. . . As a whole, the claims of the ‘521 patent describe a manufacturing process for recycling batches of mixed colored cutlet glass into glass bottles with desired properties. The claims require steps that the glass-maker must physically carry out-he cannot simply use his mind or a pen and paper to perform them.

The court disagreed with Ardagh’s attempt to analogize the ‘512 claims to Flook stating that “The [Flook] court found that, at its core, the patent claimed only a method of measuring and calculating, using a mathematical formula-an abstract idea that, without an inventive or physical application.” Instead, the court found the claims to be similar to those in Diehr: “Here, the ‘521 patent, similar to the patent-at-issue in Diehr, claims a step-by-step industrial process for creating a one-color glass end-product from recycled, mixed-color glass.”

Thanks to Joe Williams, Principal, Schwegman, Lundberg & Woessner, P.A., for preparing this post.

Federal Circuit Affirms 101 Ineligibility of a Patent Claiming Detection of Unauthorized Access to Medical Information

October 11th, 2016

A Federal Circuit Panel of Judges Lourie, Plager, and Stoll, has again affirmed a District Court decision to dispose of a patent dispute on the pleadings using Alice. In FairWarning IP, LLC, vs. Iatric Systems, INC., No. 15-1985, 2016 (Fed. Cir. Oct. 11, 2016), the Federal Circuit agreed that FairWarning’s claims on fraud and misuse detection of patient medical records are “‘directed to or drawn to the concept of analyzing records of human activity to detect suspicious behavior.’ FairWarning, 2015 WL 3883958, at *2.”[1]

The court here contrasted FairWarning’s claims with both the recent McRO, Inc. v. Bandai Namco Games America Inc., No. 15-1080, 2016 WL 4896481 (Fed. Cir. Sep. 13, 2016) and Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1337 (Fed. Cir. 2016) decisions. The more interesting distinctions made by the court involved the following characterizations of the claims in McRO versus FairWarning’s claims:

The claimed rules in McRO transformed a traditionally subjective process performed by human artists into a mathematically automated process executed on computers….As such, we explained that “it [was] the incorporation of the claimed rules, not the use of the computer, that ‘improved [the] existing technological process’”

…FairWarning’s claims merely implement an old practice in a new environment. See Alice, 134 S. Ct. at 2356. The claimed rules ask whether accesses of PHI, as reflected in audit log data, are 1) “by a specific user,” 2) “during a pre-determined time interval,” or 3) “in excess of a specific volume.” ’500 patent col. 16 ll. 34–36. These are the same questions (though perhaps phrased with different words) that humans in analogous situations detecting fraud have asked for decades, if not centuries. Although FairWarning’s claims require the use of a computer, it is this incorporation of a computer, not the claimed rule, that purportedly “improve[s] [the] existing technological process” by allowing the automation of further tasks.[2]

The emphasized portions illustrate that the court appears to base the patentability decision on whether the claimed rules have already been used by people. The “subjective nature” of animators suggests that, even if the rules are the same, perhaps having no previously identified mechanism to perform a task (e.g., written rules) means that any rule claimed would be a patent eligible improvement. In contrast, the court found that the rules claimed by FairWarning were the same rules used by people for “decades, if not centuries.” This is, however, an interesting position to take given that a well-known formula connected to a well-known machine was found patentable in Diamond v. Diehr, 450 U.S. 175 (1981), and a new formula, or rules, was at the heart of Parker v. Flook, 437 U.S. 584, 585–86 (1978).

Aside from adding another specific example of ineligible subject matter, FairWarning suggests that new rules and generic computers are patent eligible as long as the rules are not later found to be followed by people.

Thanks to Bill Kaweit of Schwegman, Lundberg & Woessner, P.A., for this post.

[1] FairWarning, at 5.

[2] FairWarning, at 7–8 (emphasis added).

Federal Circuit Emphasizes Preemption and Realization as the Path to Eligibility:

September 14th, 2016

On September 13th the Federal Circuit issued a very encouraging decision in the MCRO, Inc. v. Bandai Namco Games America appeal (decision available here).  The panel reversed a judgment on the pleadings entered by a Central District of California Court invaliding U.S. 6,611,278 (the ‘278 patent) as claiming an abstract idea under a judicial exception to §101.  The decision drafted by Judge Reyna and joined by Judges Taranto, and Stoll, found the claims of the ‘278 patent directed to a patentable process under §101.[1]

 

The decision focuses heavily on the question of whether the recited subject matter preempts all methods of performing the claimed process, which revolves around a rules-based automated method for synchronizing dialog with animated characters.  The Court finds that the recited subject matter does not preempt all methods, and thus disposes of the Alice-based §101 analysis in the first step by determining that the claims are not directed to an abstract idea (citing Enfish[2], among other cases).

 

The District Court decision also discussed preemption, but came to the opposite conclusion on patent eligibility.  The District Court determined that the claims preempted all methods of rule-based synchronization of dialog with animated characters, by incorrectly determining that the claimed rules were generic.  The Federal Circuit admonished the lower court against oversimplifying the claims when making an abstract idea determination, and when on to determine that the claims were limited to rules with specific characteristics.[3]  Judge Reyna emphasized this point in stating “[w]hether at step one or step two of the Alice test, in determining the patentability of a method, a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps.”[4]

 

In addition to the focus on preemption, Judge Reyna emphasized how the recited subject matter realized the invention discussed within the specification.[5]  The decision acknowledges that the lower court correctly identified the point of the invention, which is to improve on prior art automated synchronization methods through the use of rule-based synchronization.  The decision continues highlighting the failure of the lower court to recognize the claims as reciting a specific implementation of the discussed invention, rather than simply reciting the abstract idea of using rules to synchronize dialog with animated characters.

 

The decision intertwines the preemption and realization concepts as follows:

 

The abstract idea exception has been applied to prevent patenting of claims that abstractly cover results where “it matters not by what process or machinery the result is accomplished.” Morse, 56 U.S. at 113; see also Mayo, 132 S. Ct. at 1301.  “A patent is not good for an effect, or the result of a certain process” because such patents “would prohibit all other persons from making the same thing by any means whatsoever.” Le Roy v. Tatham, 55 U.S. 156, 175 (1853). A patent may issue “for the means or method of producing a certain result, or effect, and not for the result or effect produced.” Diehr, 450 U.S. 175, 182 n.7. We therefore look to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016) (“Enfish”)[6]

 

This portion of the decision may prove very useful in arguing that computer-implemented processes that implement a new method are not abstract ideas.  The Court specifically distinguishes the claims of the ‘278 patent versus Flook, Bilski, and Alice by recognizing that the claims recite a different method of performing synchronization versus the admitted prior art.[7]  The decision opens the door to asserting patent elibibility for any claims reciting a computer implementation of a new method to perform a certain function, in contrast to merely automating a well-known process.

 

Patent owners can hope that this decision signals a new focus by the Federal Circuit to redefine how the Alice/Mayo test is applied to computer-implemented inventions.  The decision has the potential to change how both District Courts and the Patent Office views and evaluates computer-implemented inventions.  At a minimum, patent practitioners should pay careful attention to how the Court analyzed the claims and the specification in drafting case to survive §101 scrutiny.

 

Thanks to Greg Stark from SLWIP for this posting.

 

[1] See Slip Op. @ page 27.

[2] Enfish, LLC v. Microsoft Corp., 118 USPQ2d 1684 (Fed. Cir. 2016).

[3] See Slip Op. @ page 21.

[4] Id.

[5] See e.g., Slip Op. @ page 22.

[6] Slip Op. @ page 23.

[7] See Slip Op. @ pages 24-25.

Software Patent Suits down 36%

September 7th, 2016

Patexia is reporting that software patent suits are down 36% since 2013, presumably due to Alice.

 

https://www.patexia.com/feed/weekly-chart-software-patent-litigation-declining-rapidly-after-alice-decision-20160906

The Alice v. CLS Bank Scorecard, Two Years Later

August 27th, 2016

It has now been a two years since the Supreme Court rendered its now infamous Alice v. CLS Bank decision.  It is safe to say that the Alice decision has had a profound impact on software patent enforcement, both at the Federal Circuit and in the Federal district courts.

Here is a summary of Federal Circuit Section 101 software eligibility decisions.  As you will see, very few software patents have been upheld by the Federal Circuit in the last few years.

 

Breakdown of Federal Circuit 101 Cases, Post-Bilski, by Inventive Subject Matter

Inventive Concept
at Point of Novelty
Involving Software and/or Data Count of Eligible Rulings Count of Ineligible Rulings
Involves non-technological intangible rights, for example, contract and legal rights and obligations, or abstract tasks, pricing, e.g., review an insurance policy Yes—all 0 12
Involves data representing non-technological real-world objects, e.g., food objects Yes 0 1
Involves data processing of data representing technological real-world signals, e.g., GPS signals Yes 2 0
Involves technological feature/operation of a computer display/rendering system, e.g., halftoning of grayscale images, 3-D graphics, rendering Yes—all 1 2
Involves data representing the manipulation of non-technological abstract objects or concepts, e.g., virtual game objects or bingo game Yes—all 0 2
Involves method of (arguably) technological data processing, transformation and transmission, e.g., scanning/inputting and data input from telephone Yes—all 1 4
Involves technological arrangement Web page user interface or for serving Web pages used in a commercial Web site to achieve a business purpose Yes—all 1 2

 

 

Breakdown of Federal Circuit 101 Cases, Post-Bilski, by Technological Nature

Inventive Concept
at Point of Novelty
Involving Software and/or Data Count of Eligible Patents Count of Ineligible Patents
Involves non-technological point of novelty Yes—all 0 15
Involves technological point of novelty Yes—All 5 8

 

 

Patents in Suit Involve Non-Technological Intangible Rights

Federal
Circuit Case
Patent(s) Subject Matter Eligible
IN RE SMITH, Appeal No. 2015-1664 (2016)

 

12/912,410 A card game involving rules for conducting a wagering game No
Versata Development Group, Inc. v. SAP America, Inc. (2015)

Ineligible

6,553,350 Pricing products in multi-level product and organizational groups

—Methods, computer-readable storage media, and apparatus

No
Intellectual Venture I LLC v. Capital One Bank (2015) 8,083,137

7,603,382

Credit facility for controlling financial transactions

—Methods

Advanced Internet interface providing user display access of customized Web pages

—Systems

No
OIP Technologies, Inc. v. Amazon.com, Inc. (2015) 7,970,713 Automatic pricing in electronic commerce

—Methods

No
Federal Home Loan Mortgage Corp. aka Freddie Mac v. Graff/Ross Holdings LLP (2015) 7,908,202

7,685,053

6,192,347

Securitizing property into separately valued components

—Methods and systems

No
Ultramercial, Inc. v. Hulu, LLC (2014) 7,346,545 Payment of intellectual property royalties by interposed sponsor over a telecommunications network

—Methods

No
buySAFE, Inc. v. Google, Inc. (2014) 7,644,019 Safe transaction guaranty

—Methods and computer-readable media

No
Accenture Global Servs., GmbH v. Guidewire Software, Inc. (2013) 7,013,284 Component-based interface to handle tasks during claim processing

—Methods and systems

No
Bancorp Services LLC v. Sun Life Assurance Co. (2012) 5,926,792

7,246,037

System for managing a stable value-protected investment plan

—Methods and computer-readable media

No
Fort Properties Inc. v. American Master Lease LLC (2012) 6,292,788 Methods and investment instruments for performing tax-deferred real estate exchanges

—Methods

No
Dealertrack Inc. v. Huber (2012) 7,181,427 Automated credit application system

—Methods

No
Cybersource Corp. v. Retail Decisions Inc. Corp. (2011) 6,029,154 Method and system for detecting fraud in a credit card transaction over the Internet

—Computer-readable media and method

No

 

 

Patents in Suit Involve Data Representing Non-Technological Real-World Objects

Federal
Circuit Case
Patents Subject Matter Eligibility
Dietgoal Innovations LLC v. Bravo Media LLC (2015) 6,585,516 Computerizing meal planning—Methods and systems No

 

 

Patents in Suit Involve Processing of Data Representing Technological Real-World Signals

Federal
Circuit Case
Patents Subject Matter Eligibility
ELECTRIC POWER GROUP, LLC, v. ALSTOM S.A., ALSTOM GRID, INC., PSYMETRIX, LTD., ALSTOM LIMITED, (2016)

 

7,233,843

8,060,259

8,401,710

Deriving a composite indicator of reliability that is an indicator of power grid vulnerability from real time measurements or computations of measurements from the data grid as well as non-power grid data received from the non-grid data source No
SiRF Technology Inc v. International Trade Commission (2010) 6,417,801

6,937,187

Processing of GPS signals

—Methods

Yes

 

 

Patents in Suit Involve Technological Feature/Operation of a Computer Display/Rendering System

Federal
Circuit Case
Patents Subject Matter Eligibility
Fuzzysharp Technologies Inc. v. Intel Corporation (2015) 6,618,047 Visibility calculations for 3D computer graphics

—Method

No
Digitech Image Technologies, LLC v. Electronics for Imaging, Inc. (2014) 6,128,415 Device profiles for use in a digital image processing system

—Device profile and methods

No
Research Corporation Technologies, Inc. v. Microsoft Corp. (2010) 5,111,310

5,341,228

Method and apparatus for halftone rendering of grayscale image using a blue noise mask

—Methods

Yes

 

 

Patents in Suit Involve Data Representing the Manipulation of Non-Technological Abstract Objects or Concepts

Federal
Circuit Case
Patents Subject Matter Eligibility
Gametek LLC v. Zynga Inc. (2015) 7,076,445 Obtaining advantages and transacting the same in a computer gaming environment

—Methods

No
Planet Bingo, LLC v. VKGS LLC (2014) 6,398,646

6,656,045

Storing preselected numbers for use in games of bingo

—Methods and systems

No

 

Exhibit 6-8

Patents in Suit Involve Method of (Arguably) Technological Data Processing, Transformation and Transmission

Federal
Circuit Case
Patents Subject Matter Eligibility
ENFISH, LLC v. MICROSOFT CORP., 2016). 6,151,604

6,163,775

A self-referential table/data structure designed to improve the way a computer stores and retrieves data in memory Yes
BASCOM GLOBAL INTERNET SERVICES, INC. v. AT&T MOBILITY LLC, (2016). 5,987,606 A content filering system deployed at an ISP server and making it more dynamic and efficient Yes
TLI COMMUNICATIONS LLC v. AV AUTOMOTIVE, L.L.C., (Fed. Cir. May 17, 2016). 6,038,295 Classifying and storing digital images (of any type) in an organized manner No
Content Extraction v. Wells Fargo Bank (2014) 5,768,416

5,258,855

5,369,508

5,625,465

Scanning and information processing methodology

—Methods and machines

(interface/system)

No
Cyberfone v. CNN (2014) 8,019,060 Telephone/transaction entry device and system for entering transaction data into database

—Methods and systems

No

 

 

Patents in Suit Involve Technological Arrangement of Web Page UI or for
Serving Web Pages

Federal
Circuit Case
Patents Subject Matter Eligibility
Intellectual Ventures I LLC v. Capital One Bank (2015) 8,083,137

7,603,382

Credit facility for controlling financial transactions

—Methods

Advanced Internet interface providing user display access of customized Web pages

—Systems

No
Internet Patents Corp. v. Active Network, Inc. (2015) 7,707,505 Dynamic tabs for a graphical user interface

—Methods, systems, computer-readable media

No
DDR Holdings, LLC v. Hotels.com (2014) 7,818,399 Expanding commercial opportunities for Internet Web sites Yes

 

 

Two Years After Alice v. CLS Bank: David Kappos Argues for Balance

August 27th, 2016

Morning Consult last week published an informative article from David Kappos, former under secretary of commerce and director of the United States Patent and Trade Office.

Mr. Kappos continues to warn about the overly broad application of abstract idea exemption applied by the Supreme Court in Alice v. CLS Bank, that “arbitrarily untethers patent protection from the merits of a given invention.”  He believes that through Alice’s progeny, “we are sending a destructive message that will affect all software‑reliant industries, including life sciences, transportation and agriculture: The United States is no longer a hospitable place to invest in heavy-weight software innovation.”  If you care about supporting innovation in the United States, take a minute and read his entire article:  https://morningconsult.com/opinions/terrible-twos-state-innovation-two-years-alice-v-cls-bank/.

 

 

 

 

 

Do you really think the Supreme Court had this in mind…

May 5th, 2016

When the Supreme Court invalidated the hedging claims in the Alice decision, do you think they had any idea the decision would lead to the following claim being invalidated as being directed to an abstract idea?

1. A system for monitoring and reporting a human status parameter of an individual, said system comprising:

a. a sole, unitary housing configured to be removably mounted on said individual’s body;

b. a first physiological sensor which automatically generates a first electronic sensor signal representative of a first physiological parameter of said individual, said sensor mounted within said housing;

c. a second sensor, mounted within said housing, which automatically generates a second electronic sensor signal representative of at least one of a contextual and a second physiological parameter of said individual;

d. a processing unit, mounted within said housing and in electronic communication with said sensors to receive said first and second electronic sensor signals, said processing unit generating an electronic output signal representative of said individual’s sleep-related analytical status data from at least one of said first and second electronic sensor signals, wherein the sleep-related analytical status data includes sleep onset and wake information that is derived from the at least one of said first and second electronic sensor signals; and

e. a transceiver unit, mounted within said housing and in electronic communication with said processing unit which receives said electronic output signal from said processing unit, said transceiver unit generating an electronic transmission output signal for reception by an another device.

 

 

I just don’t think a claim to a system for monitoring and reporting sleep-related analytical status data collecting using multiple sensors that generate electronic signals indicative of some physiological parameter was within the ambit of cases the Supreme Court was trying to deem ineligible with the Alice decision. The ITC decision discussed below, seems to be a perfect demonstration of how current §101 jurisprudence is out of control. In a recent ITC decision an ALJ struck down US 8,961,413 and US 8,073,707 as being directed to the abstract idea of tracking sleep.  While the claims certainly involve the abstract idea of tracking sleep, this decision is concerning in that the claims (exemplary claim reproduced above) literally recite multiple sensors collecting physiological data and a processor for outputting a signal representative of sleep-related analytical status based on one or more of the sensor signals. The ALJ’s position appears to be predicated on a finding that the claimed limitations could be performed mentally, or where equivalent to human mental work.

On the surface, this appears to be a very dubious position, as the sensors recited in the claims are likely monitoring physiological parameters not readily observable. Additionally, the processing of the electronic signals to generate sleep-related analytical status data, also seems difficult to equate to something routinely done with pencil and paper. The ALJ’s order does highlight numerous statements from the specification indicating (admitting, if the passages are not wildly out of context) that the sensors and much of the related processing were well known.  It appears that these statements from the specification may have had a major impact on the direction of this decision (I not studied the specification to determine the extent of the admissions). However, this portion of the order does emphasize an important practice tip regarding prior art or well-known techniques – tread carefully and be sure to emphasize the inventive aspects of the disclosure.

I have encountered few (if any) patent examiners that would not have identified admitted prior art within an application (as asserted by the ALJ). Accordingly, it seems a reasonable assumption that the claims recite something inventive over these admissions, or these claims would never have been granted. Further, and more importantly, the ALJ should have deferred analysis of the Novelty and Inventiveness (non-obviousness) of the claims to a more appropriate time and under the proper sections of the statue (§§ 102 & 103). A sampling of troubling statements from order (given the seemingly technological nature of the claimed subject matter – collecting data with sensors and determining sleep patterns). “The ‘413 patent, like other “methods of organizing human activity” that collect and manipulate data using a general-purpose computer, discloses an abstract idea “directed towards ineligible subject-matter.” Intellectual Ventures, 792 F.3d at 1367-68. See Alice, 134 S. Ct. at 2356 (noting that the concept of risk hedging and intermediated settlement are methods of “organizing human activity.”)”

The ‘413 patent does not seem like  a method of organizing human activity. “In the present case, monitoring sleep patterns similarly is an abstract idea, and using generic sensors and computer processors does not make claim 1 of the ‘413 patent less abstract. As set forth in the Ultramercial decision, the process of collecting data, organizing it in a computer database, and generating reports from the database to be communicated to the product’s user is “an abstraction.” 772 F.3d at 715 (finding ineligible a method for advertising and distributing content over the Internet).” The ALJ compares the sensor data collected while a person is actually asleep, to a 17th century English diarist recording daily events (while awake).  (see pages 14 – 15.) Mental steps, methods of organizing human activity, diary keeping … it is hard to discern how one can reasonably equate the claimed subject matter to any of these concepts. If these claims were actually afforded the presumption of validity they deserved, how can the inventive nature of the claims simply be dismissed without evidence or any rational reasoning?

Unfortunately, this case is likely not as significant an outlier as it appears; and may represent an ever growing list of cases where §101 is used as a blunt instrument to invalidate patents the decision maker believes were inappropriately granted. If there truly was no “inventive concept” recited in the invalidated claims, as claimed by the ALJ, then prior art should be readily available to invalidate the claim properly under §§102 and/or 103. However, like we are seeing in far too many cases these days, it is far more expedient to label the claims as directed to an abstract idea and invalidate them under §101, as no evidence or difficult work is involved. In the end, one has to wonder what the Justices on the Supreme Court would think of this decision.

My thanks to Greg Stark of Schwegman, Lundberg & Woessner, P.A., for this posting.