So one is left to wonder, why do certain elements of the software industry continue to insist that patents on programmed devices such as smart phones, tablet computers or personal computers in general should not be entitled to patent protection simply because they operate in accordance with a sequence of computer instructions instead of being hard-wired?

Recently, it occurred to me that there is indeed a difference, but it is not a difference in the nature of software vs. other technologies, a differentiation that does not stand up to unbiased scrutiny, particularly now that virtually all electronic devices are in large part programmable on one level or another, but rather in the nature of the relationship of inventor to manufacturer.  More particularly, in most industries inventors are largely separated or insulated from the management of intellectual property rights – i.e., the typical inventor is told what he or she is permitted to copy or imitate, follows those rules, and generally needs to worry no further concerning the risk of his or her company being sued for misappropriation of another party’s IP.

On the other hand, computer programmers see themselves in a different way:  almost all of them see themselves as actual or at least potential manufacturing entities (even if only as a hobby), exposed directly to the responsibilities and risks of a complex system for protecting innovation from being unfairly copied.  However, the risk and complexity of the patent system is a cost of doing business beyond the means of the typical programmer.  The barrier of the patent system thus becomes personal to a great many software developers, who see it as an infringement on their personal rights, as opposed to a business challenge or opportunity.  Again, these business challenges rarely are taken personally by inventors in other disciplines — they almost universally work for the entities that manufacture products and manage the attendant IP rights.

While in the main it is rare for a mom and pop software manufacturer to face ruinous patent threats, as I have pointed out in a prior posting, perhaps the answer to the perpetual software patent debate lies not in trying to reduce intellectual property protection in an age where intellectual property forms a larger and larger part of our nation’s wealth (not to mention playing right into the hands of unscrupulous competitors in copycat countries that are licking their chops at the possibility to clone iPhones, iPads and more), but rather in addressing what is probably the real cause of most software patent consternation by volume – programmers who take patent infringement risk personally.  For example, Section 35 U.S.C. 287 (c) of the US patent law provides a limited exemption to surgeons who may infringe a US patent in the course of treating a patient.  Perhaps a similarly styled exemption could relieve micro-entity software programmers or companies from liability for producing infringing computer programs until they are given fair notice detailing the basis for infringement, and a reasonable period of time to design around the patent or challenge it in a reexamination proceeding.  Of course there would be many loopholes to consider that may make this approach difficult to enact, but I think perhaps this proposal may get the hopelessly deadlocked software patent debate off dead-center and create a win-win situation for all parties.

Last week, an Eastern District of Texas judge granted in part Apple’s motion to intervene in Lodsys’s patent infringement suit against eleven application-developing entities.  Lodsys filed the suit in late May 2011 (amended July 2011) and Apple filed its motion to intervene only nine days later.  After ten months, the court granted Apple permissive intervention: “Apple is permitted to intervene in this suit, but such intervention is limited to the issues of patent exhaustion and licensing.”

The summary in the public record states:

“SEALED MEMORANDUM OPINION and ORDER – Apple has satisfied each of the four requirements for intervention as a matter of right under Rule 24(a)(2). The Court finds that permissive intervention is also appropriate under Rule 24(b). To avoid any potential prejudice to Lodsys rights under the License Agreement such intervention shall be and is hereby limited to the issues of license and patent exhaustion. Apples Motion to Intervene is GRANTED-IN-PART to the extent and as specified herein. Motions terminated: [4] MOTION to Intervene filed by Apple, Inc.. Signed by Judge Rodney Gilstrap on 4/12/12. (ehs, ) Modified on 4/12/2012 (ch, ).”

Apple’s interest in this suit extends beyond gratuitous defense of its application (app) developers.  Apple has an economic interest, having already paid licensing fees to Lodsys for rights to the disputed patents.  Apple asserts that the licensed rights cover developers who create apps which are sold and distributed from Apple’s App Store.  The developer typically retains 70% of the app’s revenue, while Apple takes 30% for payment processing, hosting services, and content management.  Apple contends that its rights extend to developers, giving them the freedom to create applications using Apple’s licensed technology without worrying about claims of patent infringement.  Thus, a judgment in favor of Lodsys would give them “two bites at the ‘Apple’” by generating licensing revenue from Apple and infringement damages from Apple’s app developers.

This is the essence of patent exhaustion theory, upon which Judge Rodney allowed Apple to intervene in this suit.  Patent exhaustion means that an initial sale of a patented invention severs the patent owner’s rights to that item.  More complex issues arise with respect to licensing.  A typical example is an upstream supplier licensing a patent such that downstream firms do not have to.  This is efficient from both cost and administrative perspectives, but much depends on the language of the license itself.  Here, Apple is the “upstream supplier” and the developers are the “downstream firms” that Apple claims to cover.

Apple hopes to succeed in this litigation, as much of its success can be attributed to the “There’s An App For That” culture it fosters.  In February 2008, Apple released a software developer’s kit (SDK), opening its iOS operating system for third party app development.  Recent figures from Apple illustrate how successful this strategy has been.  To date, over 25 billion apps have been downloaded, from the currently available 650,000 apps by 150,000 active developers.  This enables Apple to distribute not only apps that nearly every user downloads (e.g. Facebook, Skype, etc.) but also apps that are narrowly tailored to few users (e.g. app for users of the Hennepin County Library).  It does so by lowering some of the technical barriers to entry, namely by allowing developers to “copy and paste” certain software objects from Apple into the app itself.  For example, if an iPhone app requires a user to type on a keyboard, the app developer is not required to write the code for a keyboard.  Rather, the developer can simply “paste” Apple’s keyboard-object into the app.  This not only simplifies app development, but increases uniformity across app interfaces.

This is the essence of the Lodsys dispute.  Some of these software objects are supposedly patented by Lodsys and licensed to Apple, for example the “App Store” button in the Labyrinth app illustrated in Apples motion to intervene.  Lodsys contends that only Apple (and not third-party developers) is covered by the license.  Apple disagrees, asserting that its licensed rights protect third-party developers from suits like this one.

Although the outcome of this dispute likely depends on the exact terms of the licensing agreement, some industry watchers believe that a Lodsys triumph this would be a major blow to app developers.  Albeit a distinct possibility, Apple would most likely renegotiate its licensing agreement with Lodsys.  App developers and Apple have a symbiotic relationship wherein each depends on the other for mutual financial gain.  Apple is in a much stronger position to negotiate licensing agreements than an individual developer.  If Apple allowed Lodsys (or other similarly situated companies) to obtain judgments against developers, this could limit the very innovation that contributed to Apple’s success.  Apple is too smart to kill the goose laying the golden eggs and will most likely continue to defend its app developers.

This move by Microsoft occurred about a month after AOL hired Evercore Partners to help it find a suitable buyer for its patent portfolio.  It is interesting that the initial valuation for the patents, made in February by activist investor, Starboard Value LP, was $1 billion.

Several patent analytics companies have publicly opined on the value of the AOL patent portfolio. M-Cam’s review of the AOL patent portfolio concluded that 71% of AOL’s US patents have “potential commercial impairment.” http://www.m-cam.com/sites/www.m-cam.com/files/20120329%20-%20AOL_0.pdf . M-Cam put a valuation of $290 million on the AOL patent portfolio.  M-Cam determined that 76% of the AOL patent portfolio will be in effect for at least another ten years.  Four of the patents were reissued.  Twenty percent of the AOL patents were originally issued to other entities, in particular, Netscape Communications.

The M-Cam report identified that the technology space surrounding the AOL US patents is dominated by patents owned by IBM, Microsoft, AT&T, Sony, Sun Microsystems, and Cisco, respectively.  These companies have substantial numbers of patents that have pre-1991 patent intersections to AOL patents.  The term “patent intersections” relates to technology and citation relationships identified by M-Cam analytics.  M-Cam ranked Google as number eleven on this list. Google has no patents with early patent intersections in this area but has over 11,000 patents with AOL intersections that are post- 1991.  M-Cam concluded that companies with pre-1991 patent intersections “could have leverage over AOL” as they hold patents with similar claims that predate AOL.  M-Cam concluded that companies such as Google, Yahoo!, Digimarc and JP Morgan Chase could be licensing targets because of the high incidence of citation to AOL patents.   .

A second analytics group, MDB Capital Group, an investment bank in Santa Monica, CA, put a value as great as $1 billion on the patent portfolio in an article published by Bloomberg on March 24:  http://www.bloomberg.com/news/2012-03-23/aol-said-to-hire-evercore-to-find-buyer-for-800-patent-portfolio.html . A co-founder of MDB opined, “More than likely the buyer on this would be someone like Google or Microsoft (MSFT),”

The approach of these two companies shows the importance of context in patent valuation.  MDB started its analysis by considering likely buyers and what the patent portfolio would mean to them, as well as the “heat” of the market.  M-Cam, on the other hand, looked at the details of patents within the AOL portfolio and made its determination based upon the quality of patents within the portfolio.  Both approaches have merit.  The MDB approach is based upon business factors such as expectations regarding markets, and, “heat”, that is, a knowledge of desires to covet by particular company managements.  The M-Cam approach provides an objective analysis of a patent portfolio once the game is played, a particular company wins, and the “heat” cools.

With this move, Microsoft has increased its arsenal of basic internet infrastructure patents and may be in a better position to compete with Google.  Time will tell whether the AOL patents purchased are worth the price.

This post contributed by Janal Kalis.

The Court of Appeals for the Federal Circuit will focus on the legal standard for joint infringement in the forthcoming McKesson and Akami opinions.  Because of software’s inexorable transition from computer-readable media to network and internet distribution, these opinions significantly affect joint infringement for software inventions.

McKesson Technologies Inc. v. Epic Systems Corp., (Fed. Cir. 2011) focuses on two questions, as ordained by the en banc order:

1. If separate entities each perform separate steps of a method claim, under what circumstances, if any, would either entity or any third party be liable for inducing infringement or for contributory infringement?

2. Does the nature of the relationship between the relevant actors—e.g., service provider/user; doctor/patient—affect the question of direct or indirect infringement liability?

Akamai Technologies, Inc. v. Limelight Networks, Inc., (Fed. Cir. 2011) paraphrased McKesson’s questions in its single en banc order question:

1. If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?

Akami

At issue in Akamai is Akamai’s Patent No. 6108703 (“’703”), which uses the term “tagging” to describe prepending a URL, as suggested by Limelight’s brief: “www.provider.com/…/story.gif” may become “ghost1467.com/www.provider.com/…/story.gif”.  Limelight infringes every step but one of ‘703 by hosting the content and providing an alternate server name to its customers; the customers perform the final step by prepending the server name onto the URL.

Arguing for Akamai, Mr. Dunner’s oral argument proposed three tests:

“One test is direction or control, not ‘and control,’ ‘or control.’  The second test is concert of action.  The third test is knowingly combining steps with another.  So there are three separate tests, and in each case, there has to be knowledge of what is happening.”

Arguing for Limelight, Mr. Panner cited § 271’s sharp distinction between § 271(a)’s establishment of patent infringement as a strict liability tort, and that knowledge of infringement is required for indirect infringement under § 271(b) or § 271(c).

Judge Newman was clearly uncomfortable with this strict reading of § 271 to Limelight’s admitted desire for the customer to perform the final step.  Judge Lourie also indicated discomfort with this outcome.  However, this is exactly the arm’s length transaction contemplated by Judge Rader in BMC: “This court acknowledges that the standard requiring control or direction for a finding of joint infringement may in some circumstances allow parties to enter into arms-length agreements to avoid infringement.”  (498 F.3d at 1381.)  Indeed, that Limelight intended the result and that this portion of Limelight’s website seems to have no substantial noninfringing use (to borrow language from § 271(c)) seems to imply some degree of inequity.

McKesson

At issue in McKesson is McKesson Patent No. 6,757,898 (“‘898”), which covers a method of communication between a patient and a healthcare provider.  Defendant Epic’s software “MyChart” infringes every step of the method claim except for the first step: “initiating a communication by one of the plurality of users to the provider for information . . . .”

Mr. Joseffer restated the BMC “direction-or-control” test McKesson advanced in its brief.  He was immediately peppered with questions about his assertion that McKesson can prevail under either § 271 (a) or (b) (where § 271 (b) inducement generally requires direct infringement under § 271 (a)), but he clarified that the direction-or-control test broadens legal attribution to cover either (a) or (b).

Judge Dyk inquired about whether this method patent could be enforceable if it had been written entirely from the perspective of the doctor.  Mr. Joseffer replied that such a patent could be circumvented if the doctor asked someone in IT to perform at least one step, and explained that requiring a claim construction solution would expand multi-step method claims to an unworkable number of party subcombinations, and that no such construction could be expected to anticipate every possible scenario.

Arguing for Epic, Mr. Moore held to the Supreme Court’s decision in Aro (previously cited against Mr. Joseffer by Judge Moore), which requires performing all steps of a method patent to satisfy § 271 (a) infringement.  Mr. Moore went on to explain that § 271 (b) and (c) were created to encompass negligent or intentional acts by secondary or tertiary parties, and that statutory construction interprets their separation to preclude multiple party inducement under (a).

Judge Moore asked, “Then why would you ever file for inducement if, in your theory, the direct infringer would be the same person as the inducer because he is, in the common-law sense, making them act as his agent.  271 (b) would be superfluous in your statutory interpretation because it would be entirely encapsulated under 271 (a).”  Subsequent questioning, alas, did not clear up this apparent contradiction before the end of Mr. Moore’s time.

Conclusion

The Federal Circuit did not seem eager to adopt Akamai’s knowledge test, nor did they seem satisfied by McKesson’s argument that all patents must have a remedy.  The Judges may not find explicit support in § 271 or previous method patent cases, but seem to be open to expanding the direction-or-control test to avoid circumvention of method patents.  Though the oral arguments provided some insight the concerns of Judges Linn, Prost, Moore, Dyk, Bryson, and Newman, we are left to extrapolate the proclivities of the quieter Judges Lourie, O’Malley, Reyna, and silent Chief Judge Rader.

The outcome will have a significant effect on authoring method claims, especially as applied to software patents.  As such, we eagerly anticipate the decision, expected later this spring.

At issue here are two patents—U. S. Patent No. 6,355,623 (’623 patent) and U. S. Patent No. 6,680,302(’302 patent)—which, cover “processes that help doctors who use thiopurine drugs to treat patients with autoimmune diseases determine whether a given dosage level is too low or too high.” Id. at 3. Mayo Collaborative Servs. v. Prometheus Labs., Inc., No. 10–1150, slip op. at 5 (Mar. 20, 2012). “The claims purport to apply natural laws describing the relationships between the concentration in the blood of certain thiopurine metabolites and the likelihood that the drug dosage will be ineffective or induce harmful side-effects.” Id. at 3.

Claim 1 of the ’623 Patent is illustrative:
A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,
wherein the level of 6-thioguanine less than about 230 pmol per 8×108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
wherein the level of 6-thioguanine greater than about 400 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.
’623 patent, col. 20, ll. 10–20, 2 App. 16.

Prometheus “is the sole and exclusive licensee of the ’623 and ’302 patents.” Id. at 6. “It sells diagnostic tests that embody the processes the patents describe.” Id. This dispute arose when Mayo stopped using the Prometheus test and “announced that it intended to begin using and selling its own test.” Id. The District Court found for Mayo, noting that although its test did infringe Prometheus’s patents, the patents were invalid as they claimed natural laws. Id. at 6–7. On Appeal, the Court of Appeals for the Federal Circuit reversed, noting that the invention met the machine-or-transformation test because the steps in the claims “involve the transformation of the human body or of blood taken from the body.” Id. at 7.

Upon review, the Supreme Court rejected the Federal Circuit’s analysis and held that the patents were invalid. Id. at 24. On the one hand, this decision can be read quite narrowly. The Court does say it is not persuaded that there is a relevant transformation here and, accordingly, the machine-or-transformation test fails. Id. at 19. There is, however, a lot more to this decision than a mere disagreement as to how the machine-or-transformation test applies to Prometheus’s claimed invention. The Court also says that “the ‘machine-or-transformation’ test is an ‘important and useful clue’ to patentability,” but it does not “trump[] the ‘law of nature’ exclusion.” The Court further explained, “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Id.at 2. The question then becomes “whether the claimed processes have transformed these unpatentable natural laws into patent eligible applications of those laws.” Id. at 3.

Ultimately, we are left with little guidance from the Court. It is quite clear that analysis under Section 101 is here to stay. It also clear that the machine-or-transformation is now a useful clue rather than a test. But a new test was not provided. Only time will tell how the courts, the USPTO, and practitioners apply this decision.

Machine-or-Transformation is not always enough.
With a bit of sleight of hand, the Court cites Bilski v. Kappos for the proposition that the machine-or-transformation test “is not a definitive test of patent eligibility, but only an important and useful clue.” Id. at 7. It is helpful to look back at Bilski to spot the sleight of hand. “This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible ‘process.’” Bilski v. Kappos, 130 S. Ct. 3218, 3227 (2010). Bilski never said that the machine-or-transformation was insufficient to determine whether a process was patent-eligible. Instead, it said that there might also be other ways to identify a patent-eligible process. After Mayo, the machine-or-transformation test is not really a test at all. Rather, it is, as the Court says, a useful clue.

The transformation branch of the machine-or-transformation test now seems less than dispositive. This suggests that software patents should, when possible, include claims that tie the invention to a machine. Claims that are tied to a machine are often more difficult to draft broadly than a process claim, so include both. More importantly, claims directed to software inventions should be described, as much as possible, in terms of actual electronic circuits that are programmed to carry out a series of electronic operations. The more detail provided at the electronic circuit level, the better.

Applying an abstract principal of nature is not enough.
It has long been understood that a principle of nature cannot be patented. See Mayo, at 1. The Court also explains that “to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words ‘apply it.’” Id. at 3. To cover patent-eligible subject matter, the claim must contain an “‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.” Id. This again suggests that narrow claims are more likely to withstand judicial scrutiny. At times, the Court discusses algorithms in the same breath as principles of nature – as though algorithms are all laws of nature floating in the ether awaiting discovery. Claims tied to a machine do not ensure that the “invention” therein recited is patent-eligible, but could improve the odds that the claimed invention will be viewed as a Seciton 101 compliant “machine.”

Section 101 is not going away.
The Court also weighed in on the ongoing debate in the Federal Circuit on the judicial morass of section 101, which we have discussed previously. In rejecting a proposal offered by the United States as Amicus Curiae, the Court said that relying on Sections 102, 103, and 112 in place of Section 101 would be inconsistent with prior case law. Id. at 20–22. Further, this approach would “creat[e] significantly greater legal uncertainty.” Id. at 21. The Court did acknowledge that there at times may be overlap between Section 101 analysis and the other sections of the patent act. Id. But it also noted that the other sections are unequipped to deal with laws of nature. Id. It seems that Section 101 analysis and uncertainty is here to stay.

At issue is IPCom’s U.S. Patent No. 6,879,830 (“’830”), which covers a handover in a mobile phone network.  The district court found ‘830 claims 1 and 18 indefinite because they claimed both an apparatus and a method.  The appeals court reversed, instead finding that “the district court misconstrued the claims, which cover only an apparatus.”  The indefinite issue turned on both linguistic and legal interpretations of the claims.

The appellate court numbered and italicized portions of the claims.  When reading, pay close attention to which functions are performed by the mobile station and which are performed by the base station:

[1] A mobile station for use with a network including a first base station and a second base station that achieves a handover from the first base station to the second base station by:

[2] storing link data for a link in a first base station,

[3] holding in reserve for the link resources of the first base station, and

[4] when the link is to be handed over to the second base station:

[5] initially maintaining a storage of the link data in the first base station,

[6] initially causing the resources of the first base station to remain held in reserve, and

[7] at a later timepoint [sic] . . . deleting the link data from the first base station and freeing up the resources of the first base station, the mobile station comprising:

[8] an arrangement for reactivating the link with the first base station if the handover is unsuccessful.

The decision before each court was between two interpretations of the first paragraph:

I.          A mobile station . . . that achieves a handover from the first base station to the second base station . . .

II.         . . . a network (the network including a first base station and a second base station) that achieves a handover from the first base station to the second base station . . .

The appellate court succinctly stated the outcome of the decision:

If the mobile station implements the functions, the claims are indefinite because they recite both an apparatus—the mobile station—and method steps—the functions enumerated in paragraphs 2–7.  If the network performs the functions, the claims are not indefinite because the claims merely describe the network environment in which the mobile station must be used.

Citing Strunk and White’s sophistic classic The Elements of Style, the appellate court reminds us that modifiers should be placed next to the words they modify.  In claim 1 paragraph 1, because both the base stations and the handover are listed after “network,” they should be interpreted to pertain to the network.  Supporting this construction is the recitation of the mobile station at the end of paragraph 7: employing a reductio ad absurdum argument, it would be illogical for the author to have intended paragraphs 2 through 7 to apply to the mobile station, only to recite the mobile station again later in paragraph 7.

The appellate court then transitions from the linguistic arguments to the legal: citing Phillips, the court looks to the specification to support this construction.  Supporting the conclusion that the mobile station performs the functions in paragraphs 2 through 6, the appellate court cites the specification: “[T]he data required for the link initially remain stored in BS 1 [the first base station], and initially BS 1 does not reassign the resources . . . required to maintain the link with the MS [mobile station].”  The court then dismissed HTC’s argument that the mobile station is the “quarterback” by mapping each paragraph 2 through 6 to four portions of the specification.

The appellate court then addressed the district court’s interpretation of the prosecution history.  As noted by the district court, the ‘830 applicants distinguished prior art: “the cited section of [the prior art reference] clearly describes a process that is completely different from the claimed process . . . .”  The option suggests the appellate court agreed with the district court’s interpretation of this sentence, specifically that applicant’s use of the word “process” is tantamount to an acknowledgement that claims 1 and 18 recite process steps.  Even though the appellate court conceded that prosecution history should be examined per Phillips, the appellate court cited Philips to support dismissal of this argument: “[B]ecause the prosecution history represents an ongoing negotiation between the PTO and the applicant, rather than the final product of that negotiation, it often lacks the clarity of the specification and thus is less useful for claim construction purposes.”  Basing its opinion on the linguistic and legal reading of the claims and specification, the appellate court concluded the claims are definite and paragraphs 2 through 6 apply to the network only.

The appellate court addressed two other issues decided by the district court: whether the claims set forth a proper means-plus-function claim, and whether “disclosure of a processor and transceiver alone was sufficient to provide structure to these claims.”  To the former, the appellate court agrees with the district court that a skilled artisan would understand the specification to require a processor and transceiver:

The district court concluded that the structure corresponding to the “arrangement for reactivating” limitation was “a processor connected to a transceiver and programmed to formulate and send messages to reactivate the link, if the handover is unsuccessful.”  Although the specification does not literally disclose a processor and transceiver, the district court stated that it had “no doubt that one skilled in the art would immediately deduce that a processor with a transceiver was the structure indicated by the term.”

To the latter point, the appellate court said “the district court misstated the law, however, when it stated that disclosure of a processor and transceiver alone was sufficient to provide structure to these claims.”  Hopefully just for the sake of argument, the appellate court characterized the processor and transceiver as a general-purpose computer, and then applied this characterization to find insufficient structure: “We have ‘consistently required that the structure disclosed in the specification be more than simply a general purpose computer or microprocessor’” (quoting Aristocrat v. Int’l Game).  However, the appellate court indicated that failure to raise this issue below rendered the issue moot; unfortunately this also rendered the discussion into dicta.

Dicta aside, the overriding theme seems to be adherence to strict Phillips construction.  While we should take care when responding to office actions, it seems nothing is so as important as the plain language of the claim itself, and its specification support.  We may also do well to add a copy of The Elements of Style to our shelves.

[Lucas Hjelle contributed to this posting.]

MySpace, Inc. and craigslist, Inc. (collectively, the “Plaintiffs”) each filed declaratory judgment suits, which were consolidated, that certain patents (the “Patents”) owned by GraphOn Corporation (“GraphOn”) were invalid and, accordingly, not infringed by Plaintiffs.  Id. at 2.  These patents “relate[] to the ability to create, modify, and store database records over a computer network.”  Id. at 3; see also MySpace, Inc. v. GraphOn Corp., 756 F. Supp. 2d 1218 (N.D. Cal. 2010); U.S. Patent 6,324,538 (July 7, 1998); U.S. Patent 6,850,940 (Sept. 14, 2001); U.S. Patent 7,028,034 (May 11, 2004); U.S. Patent 7,269,591(May 11, 2004).  Each of the Patents claims “priority to a parent application, filed on December 14, 1995, and subsequently issued as U.S. Patent No. 5,778,367.”   MySpace at 5; see also U.S. Patent No. 5,778,367 (Dec. 14, 1995).  The idea of allowing a user to create records in a database via website certainly seems obvious and commonplace in 2012.  Bear in mind, however, that in 1995 manually curated web indexes were a common mechanism for finding information on the web.  The inventors of the Patents set out to address problems relating to typos and mischaracterization of sites in those indexes.  See MySpace at 5.  The invention described in the Patents allows users to “create a database entry with their own text and graphics and then choose or create searchable categories that best matched the information.”  Id.

Unfortunately for GraphOn, the Mother of all Bulletin Boards (“MBB”), which “was first made available for public use in November 1993[,] . . . provided the ability to have online Internet catalogues that could grow through user input without the need for intervention by a webmaster or administrator.”  Id. The MBB stored all of its entries in a hierarchical file system.  Id. Accordingly, the novelty and obviousness of the Patents must be considered in light of the MBB.

Since each of the claims in the Patents include the term database, if that term is constructed to include hierarchical file systems then those claims would as a matter-of-law be invalidated “as either anticipated under 35 U.S.C. § 102 or obvious under § 103.”  Id. at 7.  GraphOn argued that the term database is limited to relational databases.  Id. A relational database “separates the stored data into multiple relations or ‘tables’ and connects them through the use of identification . . . fields.”  Id. at 4.   If database covers only relational databases, however, summary judgment would be inappropriate because “there would be a genuine issue of disputed fact on the question of invalidity.”  Id. at 7.

After de novo review, the court affirmed the construction of database as “a collection of data with a given structure that can be stored and retrieved.”  Id. In reaching this conclusion, the court noted that the “Background of the Invention” section of the Patents mentioned “databases of various kinds,” which suggested a non-limiting interpretation was appropriate.  Id. at 8.  It also noted that the preferred embodiment discussed a “tree structure,” which it concluded was “more consistent with the organizational structure of a hierarchical database rather than a relational database.”  Id. In light of this construction of database, the court affirmed the district court’s grant of summary judgment of invalidity. Id. at 12.

The court’s disposition of the case without considering patent eligibility under Section 101 elicited a fiery separate opinion from Judge Mayer.  It argues that “the subject matter eligibility requirements contained in 35 U.S.C. § 101 is an ‘antecedent question’ that must be addressed before this court can consider whether particular claims are invalid as obvious or anticipated.”  MySpace, slip op. at 1–2 (Mayer, J., dissenting).  But it also apparently agreed that the Patents are invalid, calling the scope of the Patents staggering.  Id. at 3.

The court defended its avoidance of the Section 101, noting that the Section 101 issue was not “raised by the parties or decided by the trial court.”  MySpace at 13.  It also referred to Section 101 as “the patent law analogy to the Bill of Rights of the Constitution” and explained that “[t]he Supreme Court has wisely adopted a policy of not deciding cases on broad constitutional grounds when they can be decided on narrower, typically statutorily limited, grounds.”  Id. at 18–19.   And much like addressing Constitutional issues, “every time [Section 101] is presented as a defense . . . each case requires the search for a universal truth.”  In essence, the court chose not to contribute another Section 101opinion in “the face of what has become a plethora of opinions” in the Section 101 jurisprudence.  Id. at 13.

This back-and-forth between judges is reminiscent of Dealertrack, Inc. v. Huber.  In that decision, Judge Plager wrote a separate opinion that argued that “as a matter of efficient judicial process” litigants and courts should consider the “conditions of patentability” in Sections 102, 103, 112, and 251 before “foray[ing] into the jurisprudential morass of § 101.”  Dealertrack, Inc. v. Huber, Nos. 2009-1566, 2009-1588, slip op. at 2 ( Fed. Cir. Jan. 20, 2012) (Plager, J., concurring-in-part and dissenting-in-part).

Here, unlike in DealerTrack, Judge Plager is in the majority.  Although seeming to reach opposite procedural conclusions, these decisions are consistent because both address the issue that was appealed.  On appeal in DealerTrack, was a summary judgment motion of invalidity as patent ineligible subject matter.  DealerTrack at 5–6.  Here, a “summary judgment that all of the claims were invalid as anticipated or obvious” was appealed.  MySpace at 6.

One is left to wonder whether Judge Plager’s approach (avoid, if possible, the murky morass of Section 101), Judge Mayer’s approach (Section 101 is an “antecedent question”), or the court’s flexible approach (address the issue that has been raised on appeal) will be applied in future decisions.  There is certainly wisdom in avoiding the tough questions (i.e., Section 101 interpretation) until they are presented squarely.  Here, however, it was easy to avoid Section 101 because it was not the issue being appealed.  There will be future cases where the Section 101 issue cannot be avoided as easily.  If a factual question must be answered before a judgment may be reached under Sections 102 and 103, a party may seek summary judgment under Section 101 to avoid the time and expense of trial.  Under Dealertrack, the court would certainly consider the Section 101 issue.  It remains to be seen whether this decision will change that.

[Brian Wallenfelt contributed to this posting.]

The Federal Circuit recently rejected a patent held by American Master Lease LLC for methods of creating an investment structure to take advantage of an IRS tax-deferment exemption.  Fort Properties, Inc. v. American Master Lease LLC, No. 2009–1242, 2012 WL 603969 (Fed. Cir. Feb. 27, 2012).  The court ruled that the investment structure’s ties to the physical world such as deeds, contracts and real property, like the commodities and money in Bilski v. Kappos, did not transform the abstract method into a patentable process.  130 S.Ct. 3218.  Furthermore, the court ruled that adding a limitation requiring the use of a computer did not “play a significant part in permitting the claimed method to be performed,” citing the recent Dealertrack decision, recently reviewed in this blog.  Dealertrack, Inc. v. Huber, Nos. 2009-1566, -1588, 2012 WL 164439, (Fed. Cir. Jan. 20, 2012).

For those following business method patents, being comfortable with some uncertainty regarding statutory subject matter is a prerequisite, yet the Supreme Court provided some insight in 2010, when we learned three things in Bilski:

[1] the test for whether a business method is statutory subject matter is not solely the “machine or transformation” test, wherein the method is either tied to a particular machine or transforms a particular article into a different state or thing.  This test is a “useful clue” in determining patentability.

[2] business methods are indeed statutory subject matter.  This is clear because 35 U.S.C. § 273(b)(1) provides a prior user defense for “method[s] of doing or conducting business.”  As a matter of statutory interpretation, declaring all business methods unpatentable would render the above provision useless.  Thus, there must be some category of business methods that are patentable.

[3] Methods of hedging risk of price changes in the energy commodities market are not patentable under 35 U.S.C. § 101, even when a specific mathematical formula has physical ties to the real world.

If some business methods that fail the “machine or transformation” test are still patentable, what is the correct test to apply?   The US Supreme Court has yet to provide this test, but a look at history may provide some insight.  The Fort Properties decision summarizes the seminal Supreme Court precedents drawing the line between patent eligible processes and abstract ideas.  These are graphically represented below:



Bilski v. Kappos, 130 S.Ct. 3218; Diamond v. Diehr, 450 U.S. 175 (1981); Parker v. Flook, 437 U.S. 584 (1978); and Gottschalk v. Benson, 409 U.S. 63 (1972).

The Fort Properties decision also outlines recent Federal Circuit decisions on patents involving methods and computer limitations.  These are graphically represented below:

Fort Properties, Inc. v. American Master Lease LLC, No. 2009–1242, 2012 WL 603969 (Fed. Cir. Feb. 27, 2012); Dealertrack, Inc. v. Huber, Nos. 2009-1566, -1588, 2012 WL 164439, (Fed. Cir. Jan. 20, 2012); Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323, 1328 (Fed. Cir. 2011); Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1369 (Fed. Cir. 2011).

Although it is always difficult to predict what, if any, specific test the Supreme Court may enact, we can make a few generalizations.  Inventions in existing statutory categories that incorporate non-statutory subject matter as part of the invention are likely to still be patentable.  As business method patents are relatively new, we do not yet have “classic” business method patent categories.  We do know that business method patents must do more than recite a computer limitation.  A business method with ties to the “real world” must be significant to the invention, not merely using a computer to generate deedshares or to execute a calculation.  The more that the claimed invention requires a computer (as opposed to incidentally using a computer) the more likely it will qualify as statutory subject matter.

Further speculation is, well, just that.  Future cases may clarify matters or add to the uncertainty.  Here’s hoping for a more concrete statutory test for business method patents!

Observations on patent trolls, software patent indexing and freedom to operate (patent clearance) studies:

1. Often you hear that patent trolls “cost the economy” money.  This of course depends on the economy you are talking about.  If the patent troll is a US company collecting royalties from a foreign entity, it costs the foreign economy money, but brings money to the US economy.  If the US is a leader in world innovation, or at least one of the dominant players, on balance US-based trolls should be bringing money to the US economy, not costing it money.
2. Even if the transfer of wealth is within the US economy, a licensing payment merely moves the money from one US entity to another, and presumably for the benefit of innovators, an important group to reward.  Yes, it costs money to achieve this transfer (patent lawyers, licensing lawyers, technologists), but there is a lot of overhead in the sale of any product or service.
3. Ironically, it is very difficult to invent something that gets adopted by others, much less adopted widely in such a way that a “troll”, or more fairly a “non-practicing entity”, would be able to economically license the invention, if even find an infringer.  Were these threatening software patents as easy to get as the fear-mongoring press is so apt to suggest, there would be a multitude of software developers living on easy street.  In fact, that is not the case — not even close.  True, a software patent can be extremely valuable IF the invention finds its way into the mainstream marketplace (and that is always the goal for software inventors) but the reality is that a very large percentage of software inventions/companies fail.  But sometimes these companies fail not because the innovation had no value, but because there was no way to bring it to market due to one or more factors.  So, the invention/patent (if one is obtained) may still have value, and while it usually won’t be worth as much as the money and time lost on the failed commercialization, at least its a consolation prize.
4. Due to the nature of patenting, the vast majority of patents are narrow in scope.  This is due to the novelty and obviousness requirements, and due to the fact that there is, after all, tons of prior art, much of which is freely available to find on the Internet.  This means that, both in theory and in practice, it is improbable that any software developer will accidentally infringe a patent, unless that patent is one of very few that are truly broad in scope.  If software patents were a minefield for developers, the mines would generally be at least 5 miles apart, making accidentally stepping on one a very low probability occurrence.  If it is a patent on “internal functionality” that would not normally be discernible by observing the software operate or using it, the odds of the patent owner finding out you stepped on their mine are smaller yet.
5. Due to the “space” between patents, the primary use of software patents is to discourage copyists from closely replicating the functionality of existing software products that are in the marketplace and that have established users/customers.  But there is usually no reason this type of copying is necessary, and if it is, perhaps the would-be competitor would be better off inventing something new instead of duplicating what is already in the market.
6. The rare, broad patent, most often, if not in the vast majority of cases, covers a technology that takes upwards to ten years or more to achieve widespread adoption in the marketplace.  This means such a patent will lay fallow or dormant for a number of years before  it is recognized to have value.  Again, not exactly an easy business model for inventors or trolls to predict the future of technology ten years out, file a bunch of patents, and then wait to get rich.
7. On the topic of freedom to operate studies in particular, the cost of an FTO study for a well defined new product is quite reasonable for a well funded enterprise.  For any given software product, the developing entity is only adding value/innovation at a particular layer/customization of the software product they are implementing.  The developing entity need only focus on the software patents applicable to that layer, not to all the sub-components they purchase from other parties, such as database software or web servers or programming languages and libraries, etc…  Each player in the software ecosystem is, generally speaking, responsible for their own part of the overall software “stack” if you will, which reduces greatly the combinatorial complexity of the FTO required for any particular software invention.
8. For most software start-ups, where the ability to fund FTO is most strained, the core innovative concepts of the proposed software design can be thoroughly researched for under $25,000.00, and the results of that FTO study can be used both to design around, most often, most of the pertinent patents, and also ascertain whether the proposed design will be eligible for its own patent protection.  Given that it typically takes many millions of dollars for a software product to make it to market, this is a small expense.  And, if it takes much less money to get to market than that, the downside risk of reducing the scale or eliminating the FTO study altogether, is proportionately less.  For example, it would make little sense to do an expansive FTO study to launch an app that costs only $10,000.00 to develop, but certainly it would be quite simple to at least check any patents/applications noted on the documentation for a directly competitive app.
9. As far as FTO goes, it is not very difficult to find virtually all patents that may be relevant to any given software innovation or new product.  There are number of well established and highly reliable methodologies for doing so that can easily overcome differences in terminology, but admittedly  these are not readily known to the amateur sleuth trying to do a “do it yourself” patent clearance search.  It takes an experienced attorney to do it, but it is very simple to do with the right tools.
10. On another point, I have made before, I have NEVER seen a software start-up get shut down due to being sued for infringement.  I’m sure it happens about .1% of the time, but I’d genuinely be surprised if it is more than that.  Almost all fail due to the inability to get to market, for a wide variety of reasons.  The reality is that no one is going to waste their time suing an entity that is not year in the marketplace.  Even if in the marketplace, about the only time you will ever see a small company get sued is if they are a second or third comer to a product space and have deliberately ignored a preexisting patent held by an incumbent.  But now days most investors, or even software developers willing to invest their time as seed capital, are not interested in blatantly disregarding the patent rights of another party that is likely to defend its turf and has the money to do so.
11. Now an important observation.  It is actually far from impossible to index patents to make them easier to review for an FTO study.  In fact, if the USPTO or another entity spent as little as $200 per patent indexing the actual claim coverage of the patents to make them easier to research and avoid for infringement purposes, the cost to innovators to do FTO searches could be enormously reduced.  There are systems and methods for doing so that are already in the marketplace (for example see www.lucidpatent.com – which my firm helped develop to make it easier to do FTO’s), but have not yet been scaled to cover each and every issued patent.  But systems like those offered by Lucid Patent, LLC, can make it much, much easier to navigate through a large number of patents with minimal effort once those patents are indexed.

I want to make it clear that I am not saying that FTO is a trivial exercise for software developers.  And also I think that all patents, not just software patents, could be much better indexed for the purpose of infringement analysis.  On the other hand, the practical reality of the way software is built from tools and components produced by various entities in the software ecosystem, makes it much easier to navigate software patents than it would first appear, with each entity in the software ecosystem minding their particular corner of innovation for FTO, leaving the aggregator of software components to worry only about the combinations of those components they seek to pursue, which is a very manageable task not much different than most other areas of technology face.

Ex Parte Warkentine represents the only successful appellant in the decisions we reviewed.  Here, although a machine was not expressly claimed, the machine or transformation test was passed because the claimed step of “to display” required a machine and could not be performed solely in the mind.

Many of the claim rejections were unsurprising, including a number of rejections for claiming transitory signals (“A computer readable medium” in Ex Parte Perkins and Ex Parte Sawyer; and “A computer-readable medium” in Ex Parte Gonzales-Tuchmann).  More surprising was the decision in Ex Parte Keohane that “a recording medium” with “means, recorded on said recording medium” also could be “reasonably construed” to encompass a transitory signal.  It is arguably a stretch to say that the claim covers a transitory signal given the plain meaning of the language:  (“To set down for preservation in writing or other permanent form.” Record, TheFreeDictionary, http://www.thefreedictionary.com/record (last visited Mar. 2, 2012)).  Claims were also rejected for being directed only at “non-functional descriptive material” (Ex Parte D. and Ex Parte Gonzales-Tuchmann).  Finally, in Ex Parte Alverson claims were rejected as abstract because the specific steps claimed encompassed “human thought and processing.”

A summary of each of these decisions is available below.

Ex Parte Warkentine (Appl. #11/752,105, Tech Center #: 3700)
Example Claim:
1. A method for placing a pelvic implant in a patient, said pelvic implant including a cup having a predetermined cup component and a femoral stem having a predetermined stem component, comprising:

obtaining image data corresponding to the cup and femoral stem;

using the image data to display a geometrical relationship between the cup and the femoral stem corresponding to a location of the cup and femoral stem in the patient; and

virtually positioning at least one of the cup within the patient’s pelvis and the stem within the patient’s femur such that a combined anteversion between the predetermined cup component and the predetermined femoral stem component corresponds to a predetermined combined anteversion.

Ex Parte Warkentine, No. 2010-010619 (B.P.A.I. Feb. 21, 2012) at 2.

Decision:
Claims allowed under §101.  “When the image data is transformed to display a geometrical relationship, that transformation and resultant display cannot solely occur in the mind of the surgeon, or the image data is not displayed.”  Id. at 5.  Accordingly, the claimed invention is not merely an abstract idea/mental process.

Tip: A claim will not be rejected as abstract if it includes steps that cannot be performed solely in the mind.

Ex Parte Perkins (Appl. #10/085,927, Tech Center #: 2400)
Example Claim:
9. A computer readable medium having instructions for:

providing an interface having instructions to send association data;

identifying an identity service using the association data, the identity service managing resource data; and

locating a resource using the resource data.

U.S. Patent Publication No. 2003/0163575A1 (Published Aug. 27, 2003).

Decision:
Claim Rejected.  The specification says “[t]he computer readable medium can comprise any one of many physical media such as, for example, electronic, magnetic, optical, electromagnetic, infrared, or semiconductor media.”  Ex Parte Perkins, No. 2009-007029 (B.P.A.I. Feb. 16, 2012) at 4.  Accordingly, “the computer readable medium recited in these claims covers non-statutory transitory signals, namely electronic, magnetic, optical, electromagnetic, or infrared media.”  Id. at 5.  Because the “claims embrace patent-ineligible signals, they are therefore non-statutory under § 101.”  Id.

Tip: Avoid claiming transitory signals by, for example, expressly claiming either a non-transitory computer readable medium or a computer readable storage medium.

Ex Parte Alverson (Appl. #11/101,436, Tech Center #: 3600)
Example Claim:
1. A contractor certification system for obtaining lines of credit for a building contractor comprising:

a. survey means comprising a questionnaire stored in a computer database, which is provided to selected candidates within different organizational levels of a building contractor’s business for electronically gathering answers concerning information detailing business and financial practices, said answers being used for assessing business and financial practices of said contractor’s practices by an independent third party, said financial practices being used to predicate risk ranking when securing lines of credit for said contractor’s business, said business practice information comprising management structure, reporting structure, internal communications procedures, safety and labor management practices, said financial practice information comprising current projects, funding, gross margins and close out procedures;

b. said different organizational levels comprising at least one worker, foremen, project manager, engineer, and principal;

c. mapping means for studying said answers provided to said questionnaire on said computer database to select job site visits and candidates for interviews, said mapping means comprising examining and correlating said answers to determine matches, discrepancies and inadequate details;

d. on-location assessment means for determining business and financial practices at the contractor’s operations, said assessment means comprising asking questions to each of said candidates selected through said mapping means and observing examples of the contractor’s business practices and financial procedures, said assessment means further comprising visiting several active job sites at which said contractor is involved;

e. comparison means for assessing business and financial practices by way of software evaluation of results obtained from steps a-d, and electronically ranking the contractor in comparison with industry standards; and

f. reporting means for providing a grade indicative of said contractor’s rank, said reporting means further comprising computer generation of a comparative report that provides a listing of key risk factors and highlights said business and financial practices and risk factors of said contractor in comparison of said risk factors, said risk factors comprising said operational structure, marketing of new projects, current projects, details of project execution, safety procedures, statutory compliance, project administration, mediation / arbitration procedures and past litigation.

Ex Parte Alverson, No. 2010-008459 (B.P.A.I. Feb. 15, 2012) at 2–3.

Decision:
Claim rejected.  The invention “claims coverage of a human as an element of the system/apparatus per se.”  Id. at 9.  “Since the broadest reasonable interpretation of the claimed invention as a whole encompasses a human being, the claimed invention is directed to nonstatutory subject matter.”  Id. at 9–10.  For example, Claim 1 “effectively covers an abstract idea because it incorporates human thought and processing to effect claim functions . . . and the recited computer based solution activity is of insufficient cause to avoid preempting an abstraction under 35 U.S.C. § 101.”  Id. at 10.

Tip: Focus claims on reciting specific steps that use a computer or other apparatus, rather than human activity.

Ex Parte D. (Appl. #10/620,044, Tech Center #: 2400)
Example Claim:
20. An article of manufacture comprising a computer-readable storage medium encoded with one or more data structures comprising information characterizing one or more traffic flows associated with at least one traffic generator, represented as a string which includes a global header followed by one or more frames each having an associated frame header, wherein the global header comprises a clock speed field indicating a clock speed of an associated output interface.
U.S. Patent Application No. 10/620,044 (filed July 15, 2003) (as amended Apr. 9, 2008).

Decision:
Claims rejected.  The BPAI was not persuaded by the argument that “the claimed data structure defines a ‘physical or logical relationship among data elements’ and as such, the claims are drawn to statutory subject matter.” Ex Parte D., No. 2009-013829 (B.P.A.I. Feb. 15, 2012) at 4 (quoting the Appellant’s Brief).  It instead noted that “the claims merely recite non-functional descriptive material.”  Id.

Tip: Make sure that the encoded data claimed in a Beauregard claim correlate to an aspect of a computer or data transfer process.

Ex Parte Sawyer (Appl. #11/264,619, Tech Center #: 2100)
Example Claim:
1. A computer readable medium having embodied thereon a program, the program being executable by a computing device for performing a method for providing an allowed input range in a user interface window, the method comprising:

receiving a document transferred between a server and a user interface, wherein the document comprises a set of data objects and at least one rule for the allowed input range; and

creating the user interface window to correspond to a selected one of the set of data objects and the at least one rule for the allowed input range;

wherein the user interface window provides the allowed input range for the selected one of the data objects,

wherein the allowed input range is determined by the selected one of the data objects received from the document and the at least one rule received from the document.

Ex Parte Sawyer, No. 2009-012254 (B.P.A.I. Feb. 12, 2012) at 2.

Decision:
Claims rejected.  “Claim 1 given its broadest reasonable interpretation, does not preclude the ‘computer readable medium’ from being transitory. Accordingly, we construe claim 1 as embracing a transitory propagating signal, and, therefore, directed to nonstatutory subject matter.”  Id. at 5.

Tip: Avoid claiming transitory signals by, for example, expressly claiming either a non-transitory computer readable medium or a computer readable storage medium.

Ex Parte Keohane (Appl. #10/777,646, Tech Center #: 2400)
Example Claim:
11. A computer program product for providing electronic message filing recommendations comprising:

a recording medium;

means, recorded on said recording medium, for filtering an electronic message to determine at least one suggested folder for filing said electronic message from among a plurality of filing folders in a messaging filing directory; and

means, recorded on said recording medium, for distinguishing said at least one suggested folder from a remainder of said plurality of filing folders, such that a recommendation of relevant folders for filing said electronic message is provided.

U.S. Patent Publication No. 2005/0198153 A1 (Sep. 8, 2005)

Decision:
Claim rejected under 35 U.S.C. § 101 as a new ground of rejection.  “[A] computer program product included on a recording medium may take the form of transmission media, such as acoustic or light waves generated during radio frequency or infrared data communications.”  Ex Parte Keohane, No. 2009-014258 (B.P.A.I. Feb. 12, 2012) at 8.  It further explained that a “‘computer program product . . . comprising: a recording medium . . .’ can be broadly, but reasonably construed to encompass no more than a transitory, propagating signal.”  Id.

Tip: Avoid claiming transitory signals by, for example, expressly claiming either a non-transitory computer readable medium or a computer readable storage medium.

Ex Parte Gonzales-Tuchmann (Appl. #10/700,152, Tech Center #: 2100)
Example Claim:
14. A computer-readable medium having a dataflow development system comprising:

a library of components, some of the components being scalar and comprising a data transformation, some of the components being composite, and comprising a hierarchy of other components representing data transformations;

a compiler to develop and assemble components into an executable dataflow application linking components subject to schema and properties constraints;

an executor which executes the dataflow application in parallel; and

tools for accessing the functionality of the compiler, executor and component library.

U.S. Patent Publication No. 2008/0052687 A1 (Feb. 28, 2008)

Decision:
Claim rejected.  The claim does not “clearly and unambiguously recite the necessary functional and structural interrelationship between the software elements and the remaining elements of a computer.”  Ex Parte Gonzales-Tuchmann, No. 2009-013551 (B.P.A.I. Feb. 9, 2012) at 4.  Further, “‘having’ a particular environment does not necessarily imply storage of an executable program capable of causing a computer to carry out the described functionality.”  Id. In addition, “the claims are not limited to an article of manufacture or any other category of statutory subject matter, because they do not preclude a computer-readable medium that is medium, such as a propagation medium, bearing a transitory signal.”  Id. at 5.

Tip: Tie the various software and data elements of the claim together in a functional relationship that is achieved by execution of the software on a computer, as opposed to listing a collection of vaguely interrelated software components.  And avoid claiming transitory signals by, for example, expressly claiming either a non-transitory computer readable medium or a computer readable storage medium.

[Brian Wallenfelt contributed to this posting.]