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:






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.

Dave Kappos calls for abolition of Section 101

April 13th, 2016

As reported today in Law360, David Kappos, the former director of the U.S. Patent and Trademark Office on Monday called for the abolition of Section 101 of the Patent Act, which sets limits on patent-eligible subject matter, saying decisions like Alice on the issue are a “real mess” and threaten patent protection for key U.S. industries.

Kappos was quoted by Law360 saying “It’s time to abolish Section 101, and the reason I say that is that Europe doesn’t have 101 and Asia doesn’t have 101 and they seem to be doing just fine in constraining patent-eligible subject matter”.

Kappos, like many others in the patent field, are now recommending that their clients more aggressively seek protection in other countries where protection for biotechnology and software is readily available.

Its a sad commentary to the state of the law when the former Director of the USPTO is recommending to his clients that they seek protection in other countries due to the mess the Supreme Court and the Federal Circuit have made of Section 101.

The Biggest Technology Give-Away in History?

April 10th, 2016

Manny Schecter, Chief Patent Counsel of IBM, argues in his article “The Downside of Making Innovation Look Easy” ( that we risk damaging one of this country’s most innovative and successful industries because our patent system now makes it too difficult to obtain and enforce patents for legitimate computer-implemented inventions.  Mr. Schecter says we “must find a way to course-correct before irreparable harm is done in order to continue to promote innovation and the creation of newer, better computer technology.”

That Mr. Schecter, one of the most world’s most astute experts on computer patent protection, and an expert not known to engage in hyperbole, is sounding an alarm like this , should tell us all that something is terribly wrong with the direction taken by the Supreme Court and the Federal Circuit in the five years.

As Mr. Schecter points out, the Federal Circuit has found ineligible the patents on computer-implemented inventions in all but one of the last few dozen or so patent cases it has considered.

Sadly, Mr. Schecter is not being overly dramatic.  In point of fact, US jurisprudence on patent eligibility for computer-implemented inventions is fast becoming the laughingstock of the world IP community.  Worse yet, the court that once helped spearhead the expansion of the US’s lead in computer technology is now aggressively facilitating what may someday come to be known as one of the most massive give-aways of US technology in our history, and perhaps one of the biggest technology give-aways of all time.


PTAB hits delete key on Intellectual Ventures patent for electronic content distribution

March 27th, 2016

The most recent 101 PTAB road kill is an Intellectual Ventures, LLC, patent on electronic content distribution –  U.S. Patent No. 6,658,464 — in a CBM review of challenged claims 1, 8, 16, and 17 (reproduced below) brought by Motorola Mobility, LLC.  As enumerated in greater detail below, the PTAB found the claims patent-ineligible under Section 101 as lacking in technological innovation and furthermore that the claimed subject matter does not “improve the functioning of the computer itself,” or “effect an improvement in any other technology or technical field,” as there is no recitation in the claims of improved computer technology or advanced programming techniques.  (see PTAB decision, bottom of pgs. 43-44).   In short, the PTAB found that “the steps of the challenged claims are well-known, conventional, and routine and do not transform a general purpose computer (user station comprised of a processor and storage device) into a specific machine. Rather, the claimed instructions are the normal basic functions of a computer.”

Q: What can we learn from this case?  A: What we already knew — Section 101 eligibility analysis for software is so far off the rails and it no longer

The challenged claims are set forth below:

1. A software product for use at a user station, the user station including a processor and a storage device, the software product comprising computer executable instructions that, when executed by the processor:

enable a user at the user station to select content from each of a plurality of independent publishers;

effect transport of the selected content from each of the plurality of publishers to the user station over a communications network and, without user intervention, effect storage of the transported content to the storage device such that the content is retained on the storage device upon shutting down of the user station and/or deactivation of the software product; and

effect presentation of the stored content to the user at the user station with a user interface that is customized to the respective publishers.

8. The software product as set forth in claim 1, wherein the transport of the selected content to the user station is effected without user intervention.

16. The software product as set forth in claim 1, wherein the transport of the selected content to the user station is effected using a non-proprietary data transfer protocol.

17. The software product as set forth in claim 1, wherein the communications network is the Internet.

According to the PTAB, none of claims 1, 8, 16 or 17 constitute a “technical invention”:

“Claim 1 is directed to a software product that comprises instructions that select, transport, store, and display content.  As is discussed in greater detail in the next section, the steps of claim 1 provide a very general description of how components carry out instructions. For example, the instructions are “executed” by the processor.

The method of claim 1 is analogous to claim 17 of Versata in that claim 1 is directed to a business process of distribution of electronic information products that includes minimal computer-related limitations. Likewise, the fact that the steps are accomplished via a general purpose computer (a user station, communication network, and user interface) does not change the character of the invention. Just as the patent at issue in Versata sought to reduce the need for large data tables, so too the patent at issue here sought to solve problems related to OSPs and M2M transfers. This did not transform claim 17 in Versata Development into a technological invention, nor does it do so for claim 1 here.

Accordingly, the ’464 patent does not solve a technical problem using a technical solution.”



In re Ray Smith: Gaming art patents now a bad bet

March 17th, 2016

The CAFC just issued a brief, but potentially far reaching, opinion in In re Ray Smith; available here –

In seven short pages the CAFC appear to have invalidated all patents directed to the gaming arts that do not utilize some form of new material objects (e.g., new type of cards or new physical playing board).  The panel, Moore, Hughes & Stoll, found claims, which were directed to a variation of Blackjack, to be directed to the abstract idea of a “method of conducting a wagering game.”  While this abstract idea essentially ignores all of the actual recitations in the claims, it is probably a reasonable finding.  Next, the court continued by purporting to evaluate the claims under the second prong, and found that the claims here require shuffling and dealing, which are conventional activities that cannot impart an inventive concept.  Here the court seems to completely ignore the aspects of the claims that would make them patentable under any section of 35 U.S.C..

Nothing in the written opinion suggests that the court evaluated (or that Applicants argued) that the “process” (e.g, the rules of the game) were the inventive concept.  Why can’t the game rules be the inventive concept, other than under this new application of 101 game rules would seem to easily satisfy all other tests for patentability.  Until this decision, it was my understanding that game rules, such as embodied in these claims, were patent eligible subject matter and it was the “process” or rules that were evaluated to determine patentability.

The Court did leave open a crack for some limited future innovation in this area:

That is not to say that all inventions in the gaming

arts would be foreclosed from patent protection under

§ 101. We could envisage, for example, claims directed to

conducting a game using a new or original deck of cards

potentially surviving step two of Alice.

The brief opinion, with potentially wide reaching effects, is troubling, especially when one considers how limited the remaining options for intellectual property protections appear to be for novel gaming variations based on old, well-known physical elements.  Gaming rules, as such, are not protectable under copyright, since they would likely be considered functional.  Rules are not protectable as trade secrets, since they have to be published to be useful to anyone.  Trade dress and design patents would only be useful for protecting particular decorative aspects, but not the rules themselves.

Where does the CAFC come up with support for removing this formerly patentable area of innovation from the realm of patent eligible subject matter?  Is this opinion limited by the face that these claims are directed to a wagering game, providing a link to a “fundamental economic practice”?  I wouldn’t bet on future courts or litigants narrowly construing this decision. 

The game rules laid out by the example claim provided in the opinion are a very specific implementation of the abstract idea of conducting a wagering game.  These claims do not even remotely threaten all applications or future innovations around the idea of conducting a wagering game.  At least based on the information contained within the courts opinion, this case bears very little relationship to Alice, or even the type of patents Alice represented (e.g., well known business processes performed by a computer).

Apparently the pendulum is still moving in the wrong direction!

Thanks to Greg Stark, Principal, Schwegman, Lundberg & Woessner, P.A., for this post.


February 17th, 2016

The realm of patent ineligible “abstract ideas” arguably grows ever larger by the day, and now encompasses inventions that require movement of shipping containers.  How the handling, storage and transportation of heavy metal objects that are the backbone of the shipping industry could plausibly be characterized as lacking presence within the realm of 101, is definitely a head scratcher (check out claims repeated below).

In this case, Plaintiff, Wireless Media Innovations, LLC, is the owner of two patents covering certain systems and methods relating to the monitoring of shipping containers. The Patents are U.S. Patent Number 6,148,291 (“ ‘291 Patent”) and U.S. Patent 5,712,789 (“ ‘789 Patent”). Defendant Maher Terminals and Global were each accused by Plaintiff of operating at least one terminal operating system and operative methods associated therewith to monitor the locations and load statuses of containers at Defendants’ respective terminals.  Defendants filed two separate motions to dismiss asserting that Plaintiff’s Patents are ineligible for patent protection under 35 U.S.C. § 101 because they are directed at an abstract idea.

As illustrated below, the Federal Circuit affirmed the invalidation of both patents under 35 U.S.C. Sec. 101 in a per curiam decision without opinion, dated February 8, 2016.  Essentially, the Wireless Media Innovations decision leaves standing a decision of the New Jersey district court that essentially precludes patent protection for computer programs adapted for inventory management, even if the claimed management system requires the physical transportation of inventory in the facility.   The decision of the New Jersey district court reasoned that the claims of the ‘789 and the ‘291 Patents are directed to the same abstract idea: monitoring locations, movement, and load status of shipping containers within a container-receiving yard, and storing, reporting and communicating this information in various forms through generic computer functions. The district court found that Plaintiff’s arguments that the patent claims are not abstract because they require physical steps and include the use of tangible components is beside the point.  According to the district court, the claims merely recite the abstract idea of monitoring the location and load status of containers in a yard.   The district court further noted that “the majority of these steps comprise the abstract ideas of the process of monitoring and moving shipping containers and collecting the relevant data as to the location of the shipping containers”, and that “adding routine steps of recording, identifying, and communicating the ID code of a particular container, or moving the container from the receiving area to a vehicle does not transform an otherwise abstract idea into patent-eligible subject matter.”



Claim 1 of each respective patent ‘291 and ‘789 are reproduced below:

1. A container monitoring system for accumulating and storing information on shipping containers including container location and container load status, the system comprising:

a receiving area for receiving containers to be monitored by the system, said receiving area within a defined boundary within which containers are to be monitored by the system,

a container entry point at the boundary at which containers are identified by pre-existing identification codes which are recorded at the container entry point,

a switching vehicle for moving containers to and from a receiving area and to and from a facility within the boundary according to instructions received from the facility, and

means for recording information on locations and load status of containers within the defined boundary.

1. A computerized system for monitoring and recording location and load status of shipping containers relative to a facility with an associated yard defined by a boundary within which containers are to be monitored by the system, and a controlled entry point to the boundary, the system comprising:

means for recording identification codes of containers which enter the boundary,

means for communicating and recording information on movements, location and load status of containers within the boundary in response to movement and changes in location and load status of containers made according to instructions received from the facility,

means for generating reports of recorded information on locations and load status of containers within the boundary, and

means for generating reports on container locations and load status relative to designated docks associated with a facility.



PTAB refuses attempt to kill ATM patent as claiming abstract idea: NRT Technology Corp. and NRT Technologies, Inc., Petitioner, v. Everi Payments, Inc., Patent Owner, CBM2015-00167

January 26th, 2016

In what appears to be a small measure of good news (and hope for the future) for patent holders in the automated teller machine art, the PTAB last week held that claims to an ATM-implemented money dispensing process were not clearly invalid under Section 101 for claiming an abstract idea.   The case, NRT Technology Corp. and NRT Technologies, Inc., Petitioner, v. Everi Payments, Inc., Patent Owner, CBM2015-00167 , refused to find the following claim 1 of US ‘782, invalid in view of Alice:

1. A method of providing money or an item of value to an account-holder, the method comprising:

identifying an account to a terminal;

entering a personal identification number into the terminal;

requesting money or an item of value based upon the account via a first type of transaction;

forwarding the first type of transaction to a processor;

forwarding the first type of transaction from the processor to a first network;

forwarding the first type of transaction from the first network to a bank;

making a denial of the first type of transaction due to exceeded pre-set limit;

forwarding the denial to the processor;

notifying the account-holder at the terminal of the denial of the first type of transaction, and asking the account holder if they would like to request the money or item of value via a second type of transaction;

requesting money or an item of value based upon the account via a second type of transaction;

forwarding the second type of transaction to the processor;

forwarding the second type of transaction from the processor to a second network;

forwarding the second type of transaction from the second network to the bank;

making an approval of the second type of transaction;

forwarding the approval to the processor;

and instructing a money location separate from the terminal to provide money or an item of value to the accountholder.

In its holding, the PTAB stated:

“As Patent Owner points out, Petitioner has oversimplified the challenged claims. Prelim. Resp. 31. The challenged claims are not directed simply to the idea of providing money to an account holder or using trial- and-error until success is achieved. Rather, the claims are directed to particular methods of providing money to an account holder using an ATM via a POS transaction after an ATM transaction has failed. See Alice, 134 S. Ct. at 2354 (“Applications of such concepts to a new and useful end . . . remain eligible for patent protection.”) (internal quotation marks and brackets omitted). Further, Petitioner’s analysis omits any consideration of the elements of the claims as ordered combinations to determine whether the additional elements transform the nature of the claims into a patent-eligible application.  It was Petitioner’s burden to do so.”

Perhaps this is a harbinger of the use of a more balanced and logical use of the abstract idea exception to 101 eligibility, with the PTAB giving “ordered combinations” of elements some credence to differentiate abstract ideas from patentatable applications of those ideas.

Excellent Presentation on Section 101 from Steve Kunin and Michael Kiklis

November 2nd, 2015

I was fortunate enough to get permission from Steve Kunin and Michael Kiklis to post a copy of their Nov. 2 presentation on Section 101 and Alice:  101 Presentation from Kunin and Kiklis 

The findings in this report could be characterized as bleak for software patents in Federal Court – both at the district court and Federal Circuit level.  I counted over 100 Federal district court cases finding software patents ineligible under Section 101, and there are dozens of Federal Circuit decisions as well coming to the same conclusion about the software patent at hand.  Few cases have found eligible subject matter.  I didn’t calculate it, but the survival rate at present couldn’t be greater than 20%, and its probably as low as 10%.  On the other hand, the large majority of the invalidated software patents were, in my opinion, squarely on the “suspect” end of the spectrum.  It will very interesting to see how all the appeals of the district court opinions play out at the Federal Circuit in the next 12 months.

Here are some of Steve and Michael’s tips from their presentation, for drafting software patents:

  • Take advantage of safe harbors

−Improvements to another technology or technical fields

−Improvements to the functioning of the computer

−Take advantage of the training examples (21, 23, 25)

  • Emphasis that claimed invention provides technical solutions to technical problems
  • Emphasize the novel and non-obvious limitations that are not conventional and are subject to the MOT test for process claims.
  • Point out why the new combination of old elements achieves a novel and non-obvious result (i.e., an inventive contribution)

Akamai Technologies, Inc. v. Limelight Networks, Inc.: Federal Circuit brings defines liability for “joint enterprises”

September 2nd, 2015

In Akamai v. Limelight, Inc., Case Nos. 2009-1372, -1380, -1416, -1417, (Fed. Cir. Aug. 13, 2015) (en banc), the Federal Circuit updated and clarified the standards for determining if direct infringement has occurred in cases where the actions of multiple parties must be combined in order for all elements of a claim to be performed.  It had been considered well-established that the “whoever” in the “whoever without authority makes, uses, offers to sell, or sells any patented invention … infringes the patent” of 35 U.S.C. § 271(a) must be a single entity, or an entity in combination with its agents, in order for direct infringement to occur.  Additionally, since inducement under 35 U.S.C. § 271(b) requires that the induced party be liable for direct infringement, it is often the case that when multiple parties divide the elements of a claim between them, damages are not available for either direct infringement or for inducement.  While the breadth of Akamai is not yet known, this case will change the result in at least some client-server software patent cases.

According to previous cases, an entity can be held accountable for the actions of others for the purpose of finding direct infringement when the others are agents of the entity or when the others are contractually obligated to perform the actions for the entity.  Akamai provides two additional tests:

  • “where two or more actors form a joint enterprise, all can be charged with the acts of the other, rendering each liable for the steps performed by the other as if each is a single actor” and
  • “liability under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.”

Each of these new tests contains multiple elements that must be shown by the patentee to establish the infringer’s liability.

Joint enterprise liability was not at issue in Akamai, but the court outlined the four elements that must be shown to establish liability for a joint enterprise:

  • an agreement, express or implied, among the members of the group;
  • a common purpose to be carried out by the group;
  • a community of pecuniary interest in that purpose, among the members; and
  • an equal right to a voice in the direction of the enterprise, which gives an equal right of control.

With respect to conditional participation liability, both of the listed elements must be shown:

  • conditioning of participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method, and
  • establishing the manner or timing of that performance.

For many commercial products, the “conditioning” element will be easy to show.  For example, consider the following hypothetical claim:

A method comprising:

at a server, storing data;

at a client, generating a request for the data and transmitting the request to the server; and

responsive to receiving the request at the server, transmitting a response from the server to the client.


In this example, the client will not receive the response unless the client generates and transmits the request.  Accordingly, the client will not realize the benefits of the method from the entity providing the server unless the client performs the method steps, and the “conditioning” element is met.

Showing the “establishing” element may be more difficult.  Akamai does not address the minimum requirements of this element.  The court found that evidence showed that Limelight provided a Technical Account Manager to “lead the implementation of Limelight’s services,” and thus “Limelight establishes the manner and timing of its customers’ performance so that customers can only avail themselves of the service upon their performance of the method steps.”  However, the general rule established by the court is that the manner or timing of the performance must be established by the accused infringer.

Potentially, establishing the manner or timing of the performance will encompass many commercial activities.  In the hypothetical example claim above, if the entity providing the server also provides a client application including a user interface to generate the request, the use of that application by a user to perform the “generating a request” step is in a manner established by the entity, even when the entity does not control the timing of the user’s action.  Similarly, if the action on the client can only be performed while the server is running (e.g., to respond to the request), then the entity controlling the server at least arguably controls the timing of the performance.

Thus, while ideal claims will still read directly on a competitor, claims requiring actions by both a competitor and its clients are no longer dead on arrival, after Akamai.

Thanks to Domenico Ippolito at Schwegman, Lundberg & Woessner for this post.