February 2007

Patent Attorneys: Ethics of Representing Out-of-State Clients

The USPTO today released a proposed rewrite of how patent attorneys and agents may represent others before the PTO.

Role of a Patent Practitioner: The new rules broadly define the meaning of “practice before the Office” to include patent preparation & prosecution, providing advice regarding patents vs. other protections, and handling petitions & appeals within the PTO. Proposed 37 CFR 11.5.

Missing from the enumerated roles are activities incident to the preparation and prosecution of patent applications. The notes accompanying the proposal spell out that these incidental roles “are no longer included in the definition” of PTO practice. The primary incidental activity is the drafting of assignments and licenses.

According to the proposal, “a registered patent agent is not authorized by his or her registration to practice before the Office to draw up a contract or to select contract forms for a client relating to a patent, such as an assignment or a license.” The PTO is unsure whether merely ‘causing an assignment to be executed’ might be appropriate and asks for comment.

Attorneys Implicated As Well: As Russ Krajec pointed-out earlier [link], this reading of the rules would potentially impact patent attorneys as well since many represent a large number of out-of-state clients.  (Are you practicing New York law when you advise your New York client about an assignment from its New York employee that will be interpreted under New York laws? Are you a licensed attorney in New York?) 

Role of Foreign Drafters: “Nothing in this section proscribes a practitioner from employing non-practitioner assistants under the supervision of the practitioner to assist the practitioner in preparation of said presentations.” According to the notes, allowed activities include patent drafting.

What is Missing: The new rules leave out (1) any CLE suggestions as well as (2) any thought of an ethical duty to ensure access to legal representation (i.e., pro bono).  I’m not a fan of mandates, but the patent bar (both attorneys and agents) is lacking in both of these areas.  (You should note that the rules package is fairly comprehensive and covers many other details of practice in addition to those mentioned above.)

I would like to hear comments on (1) how attorneys and agents deal with state-representation issues; (2) has the idea of a nationwide practice became the de facto rule; (3) are bar associations too compliant with this activity; (4) are there examples of attorneys being disciplined for out-of-court activities in states where they have no clients?

Notes & Docs:

  • Any comments are due by May 29, 2007 and should be e-mailed to Harry Moatz: ethicsrules.comments@uspto.gov. (Mr. Moatz is the director of the OED). The PTO wants to find a good solution here.
  • For those of you with a memory, these proposed changes are a revision of the December 2003 proposal based on the 100+ comments received from the public.
  • If you leave an anonymous comment, please use a fake email address – otherwise we can see who you are. . .
  • Comparison of Proposed Rules to Current Rules
  • Read the New Rules (204 KB)

Plaintiffs: Get Expert Testimony Before Summary Judgment

ScreenShot024AquaTex Indus. v. Techniche Solutions (Fed. Cir. 2007).

AquaTex owns a patented multi-layered, liquid-retaining material used in evaporative cooling garments. Techniche is accused of infringement.

In an earlier decision, the CAFC asked the lower court to examine whether Techniche’s products infringed under the doctrine of equivalents (DOE).  And again, the district court found that the DOE could not extend the AquaTex patent to cover Techniche’s activities — holding that (1) a narrowing amendment during prosecution estopps AquaTex from asserting the DOE and (2) AquaTex failed to prove that the asserted equivalent (filler layer) performs “substantially the same function in substantially the same way” as the patented method.

Prosecution History Estoppel: “The surrender of subject matter during prosecution creates a presumption that the patentee is precluded form recapturing that subject matter through the doctrine of equivalents; this presumption can be rebutted by . . . a showing that the amendment was unrelated to patentability.” 

DOE is executed on an element-by-element bases, and, taking a step back, CAFC noted (for the second time in this case) that estoppel only applies if the narrowing amendment bears a direct relation to the alleged equivalent element. Here, there was no direct relationship because the amendment “was directed to a completely different claim limitation.”

Thus, the district court erred in applying prosecution history estoppel

Function-Way-Result: The standard test for infringement under the doctrine of equivalents requires that each element of the asserted claim either be infringed literally or under the DOE. An element infringes under the DOE if claimed element differes insubstantially from the accused product or if the asserted element performs the substantially same function in substantially the same way with substantially the same result.

The meaning of “substantially the same” is informed both by the claim language and the specification itself. However, the inquiry “leaves no room for consideration of the patentee’s product.” Here, the lower court used the patentee’s description of the product on its website to determine that the function of the claimed filler layer element included hydrophobic activity.  That was an error because it shifted the focus from the patent to the product.

Evidence: Finally, for a patentee to win on DOE, it must present “particularized testimony and linking argument on a limitation-by-limitation basis” showing equivalence. The gold-standard for this evidence is the testimony of a qualified PHOSITA — “typically a qualified expert, who (on a limitation-by-limitation basis) describes the claim limitations and establishes that those skilled in the art would recognize the equivalents.”

Here AquaTex had only provided lawyer argument and generalized testimony about the accused product. The CAFC found the evidence lacking and thus that the defendant should be awarded summary judgment of non-infringement.


  • Does anyone know if expert reports had been submitted yet in this case?
  • Read the case

Community Review: Volunteers?

Some of you may know that the PTO is implementing a new ‘community patent review’ pilot project later this spring.  Applications will be published on a website and the general public will have a chance to identify prior art and vote on its relevance to the pending application.  The public input will then be given to the Examiner to use. (The Examiner will do his own search and will not be required to use the community-identified art).

The initial pilot will be restricted to 250 volunteer applications related to software and technology inventions (TC 2100). Several companies have already volunteered their applications, including GE, HP, IBM, INTEL, M$, Oracle, and others. Some of these same companies have also volunteered employee time to help ‘examine’ the applications.

Volunteer applications will be quickly published (free early publication) and the public will be invited to submit prior art and commentary for four months. After that, the application will be taken out of turn and examined first. There will be a public meeting at the PTO on March 12 to discuss the pilot program.

Let me know if: (1) your client is interested in participating; or (2) you have comments on the program.  (dcrouch@gmail.com)

I see a few reasons why companies may fear participating in the program: (1) funny or erroneous patent applications may be seen as jokes; (2) the publicity may focus the public on the company’s weak and potentially vulnerable patent portfolio — something that may reflect on the quality of R&D; (3) a perception that even if the patent eventually issues, public comments such as “this patent is clearly obvious. . .” could potentially hurt a patentee later-on during litigation; (4) a patent that may otherwise pass through the PTO may be blocked because of prior art found during the community review; and (5) this deviation from the norm could lead to more expense during prosecution.

Some of these same reasons may lead other more aggressive companies or individuals to give the community review process a try: (1) the patents will receive some publicity that may improve the public’s perception of the company’s patent portfolio; (2) a patent that issues should be ‘stronger’ and more likely to be upheld in litigation — much like a patent that has been successfully reexamined; (3) speed.

Leave your comments below regarding reasons for/against participating in the program.

Monday fun: One More for the Hopper

Quite amazing technology.  Mr. Roller’s abstract reads:

Chris Roller wants exclusive right to the ethical use and financial gain in the use of godly powers on planet Earth. The design of godly-products have no constraints, just like any other invention, but the ethnic consideration of it’s use will likely be based on a majority vote of a group, similar to law creation. The commission I require could range from 0-100% of product price, depending on the product’s value and use.

Claim 1.

Godly powers are being used on planet Earth. For example, technology (i.e. Electronic and Medical) is being assisted by godly powers throughout the planet. Godly powers could be used prior, during, and after godly product/procedure. For example; Before–in the making of a device, like a micro-processor chip. During–in the operation of a device, like an inkjet printer cartridge. Afterwards–like gradual scar removal from breast implant surgery. A magician might perform magic before, during, and after, for any given trick (“illusion”).

My question, of course, is why the PTO classified this application as an optical amplifier in Class 359? 

Credit: Patently-O reader Helen Samson (Nufern) ran across this application while scrolling through new optical patent applications.

Background Reading:

Monday Fun: Warp-Drive and Branding-Energy

In Feb-06, we discussed the Worsley-Twist warp drive patent application. The Worsley-Twist warp drive does not depend upon traditional emissions of matter to create thrust.  Rather, the warp-drive creates a change in the curvature of the space-time continuum — thus allowing travel by warping space-time.  At that time, we noted that the Worsley & Twist patent application recently suffered a major setback — with the Examiner requesting a model of the invention. Although rarely implemented, 35 U.S.C. 114 allows the PTO to “require the applicant to furnish a model of convenient size to exhibit advantageously the several parts of his invention.” Among other rejections, the Examiner has asserted a rejection under 35 U.S.C. 101 for lack of utility — finding that the invention is inoperable.  In this case, it looks like the cost of building the model and proving utility were too much as the application appears to have been abandoned.

Volkswagen Branding-Energy

Since we have been focusing on pendency, I also looked back to the still-pending Branding-Energy patent application to see whether any action has been taken on this application that was filed in August 2003 — still no substantive action.  Since this application has been classified in TC 705, an initial office action is expected within the next nine months.

The abstract reads:

A branding-energy amplifier for amplifying the branding-energy of the Volkswagen Beetle. Branding-Energy Amplifier established upon the principle of Node Plurality.

As explained in the specification:

If you were to see a singular Marilyn Monroe walking down the street, you probably would notice.  If, however, you were to see 88 Identical Marilyn Monroes’s single filing fashionably in parade-dress parade, you would likely stop whatever you were doing and stare in exasperated amazement wondering all the while what in the world was going on. . . . By extension then, a Volkswagen beetle limousine with 88 humps, does not look the same, does not function the same, and is, in fact, not the same, as a Volkswagen beetle with 1 hump because they do not share identical Automotive DNA.

View the Volkswagen Beetle Branding Energy patent at Pat2PDF.  

Recapture: Disclaimer in Parent Must be Rescinded in Continuation

Hakin v. Canon-Avent (Fed. Cir. 2007).

Hakim sued Avent for infringing his leak-resistant drinking cup patent. After claim construction, the district court found no infringement.

The asserted patent was filed as a continuation. In the original application, Hakim argued over prior art by stating that the flexible-member opening was a “slit.” When Hakim filed his continuation, he notified the examiner that the new claims were broader than those previously allowed. The Examiner then allowed the new claims without rejection.

Disclaimer in Parent: The usual rule is that “an applicant cannot recapture claim scope that was surrendered or disclaimed” even when a continuation is filed. However, “a disclaimer made during prosecution can be rescinded, permitting recapture of the disclaimed scope.” In order to rescind a disclaimer, ”the prosecution history must be sufficiently clear to inform the examiner that the previous disclaimer, and the prior art that it was made to avoid, may need to be re-visited.”

Applying this rule to Hakin’s prosecution history, the court found that simply informing the examiner of the new broader claims was insufficient to rescind the prior disclaimer of scope.


Prosecution Data: Continuations

In 2006, PTO relations with the patent bar were near nadir because of a proposed set of rules that would radically change the practice of filing continuation applications. Although patent attorneys generally avoid public comment, the continuation proposal led to several hundred public submissions.(n1) 

Many of the comments argued that continuations only play a minimal role in increasing pendency. Using a sample of 10,000 recently issued patents, I wanted to see whether the technology areas with the largest pendency are flooded with continuation applications. A strong correlation would indicate that the PTO was correct in its assessment that continuations are a major cause of the ‘pendency crisis.’

For each technology classification, I calculated two primary statistics: (1) the average pendency of the issued patents (months from filing the application until issuance) and (2) the prevalence of continuations (as measured by the percentage of issued patents that had either one or more non-provisional parent or multiple provisional parents).

As it turns out, there does not appear to be much correlation at all.(n2) The lack of correlation is exemplified when looking at the technology areas on the extremes. For instance, there is no overlap between the top-ten-percent of classes with the highest pendency and the top-ten-percent of classes with the highest prevalence of continuations.

As can be seen in the linked Google Spreadsheet, technology areas of chemistry and drugs have the highest rates of patenting continuations. For those areas, over half of the issued patents are continuations.



  • Spreadsheet of Results
  • Cite as Dennis Crouch, “Prosecution Data: Continuations,” Patently-O, February 23, 2007.
  • n1: At this point, the rules have neither been implemented nor discarded.
  • n2: I suspect that with a larger sample size, a small but statistically positive correlation would be identified.

Microsoft v. AT&T Oral Arguments:

AT&T sued Microsoft for patent infringement and wants to collect damages for foreign sales under Section 271(f) of the patent act. That section calls for infringement of a US patent if “components” of a patented invention are supplied abroad to be combined as in a would-be infringing manner. Microsoft ships software code abroad that is then copied before being installed in an infringing manner. Microsoft argues that its actions do not satisfy 271(f) because (1) software code itself (separated from a physical disk) cannot be a component because it is not physical and (2) only copies of the code are installed. Notes from the transcript:

Patentable Subject Matter:

MR. OLSON [For Microsoft]: The ’580 patent is a program, as I understand it, that’s married to a computer, has to be married to a computer in order to be patented.
JUSTICE SCALIA: You can’t patent, you know, on-off, on-off code in the abstract, can you?
MR. OLSON: That’s correct, Justice Scalia.
JUSTICE SCALIA: There needs to be a device.
MR. OLSON: An idea or a principle, two plus two equals four can’t be patented. It has to be put together with a machine and made into a usable device.

JUSTICE BREYER: I take it that we are operating under the assumption that software is patentable? We have never held that in this Court, have we?
MR. JOSEFFER: No, but . . . that’s not relevant here . . .

JUSTICE STEVENS: Your time is up, but I want to ask you one yes or no question. In your view is software patentable?
MR. JOSEFFER: Standing alone in and of itself, no.

. . .

MR. WAXMAN [For AT&T]: The code is not patentable.

What is a Component:

MR. JOSEFFER [For the Government]: I think the most important point here is that the components of patented inventions do not have to be patentable. Many patented inventions are comprised of a bunch of parts where the parts themselves would not be patentable because say they were standard off the shelf parts.

MR. OLSON: Physical things must be components under 271(f) because they must be supplied from somewhere. Ideas have no physical from. They’re in the air. The words used, “supplied from” tells us that it must be a physical thing combined with. Ideas don’t combine with physical things to make a patented invention. Physical things do.

Scalia’s Jokes:

JUSTICE SCALIA: I hope we can continue calling it the golden disk. It has a certain Scheherazade quality that really adds a lot of interest to this case.

Scared that AT&T will Control our Thoughts:

JUSTICE BREYER: But I then would be quite frightened of deciding for you and discovering that all over the world there are vast numbers of inventions that really can be thought of in the same way that you’re thinking of this one, and suddenly all kinds of transmissions of information themselves and alone become components. So I’m asking you, is there any outside the computer field analogous instance where the transmission of information has itself been viewed as the transmission of a component?


Recent Business Method Patentable Subject Matter Rejections

In a somewhat random fashion, I pulled up a few file histories for patent applications classified in Class 705 (Business Methods) to see the extent that the PTO is asserting unpatentable based on the statutory subject matter requirements of 35 USC 101. I have attached a few of the exemplary statements from PTO Rejections:

Post Lundgren:

Lundgren Contemporary:



  • E.g., 20040138927, 20020095346.

Are Patents Property: Zoltek v. US

F22-Rapter The Takings Clause of the Fifth Amendment to the US Constitution provides that the Government shall not take private property “for public use, without just compensation.”  The question now before the Supreme Court in Zoltek is whether patent rights constitute private property protectable under the Fifth Amendment.

Zoltek’s Fifth Amendment claim was denied by the CAFC and Zoltek has now petitioned the Supreme Court to hear its case. According to petitioner’s counsel, amicus briefs will be due by March 22, 2007 unless the Government requests an extension of time to file its response (something that is likely).

For many Patently-O readers, this case is a no-brainer — just like you thought that patents came with a right to exclude . . .

[More to come in a later post


Government Contract Infringement Must Be Pursued in Federal Claims Court

Sevenson Environmental v. Shaw Environmental (Fed. Cir. 2007)

Colonie NY has a lead-contamination problem. The site is owned by the US Government, and Shaw was hired to help with the remediation. Sevenson holds several patents on methos for cleaning up waste by applying phosphoric acid. Sevenson sued Shaw for infringement, but the district court dismissed the case — finding that the US Gov’t is the proper defendant.

Shaw’s contract with the US Gov’t authorize shaw to “all use and manufacture” of any patented invention whose use is necessary to comply with the contract. The contract dovetails with 28 USC 1498, which provides that a patent holder’s claims arising out of a a contractor’s infringement accure against the US and must be brought in US Court of Federal Claims. (So long as the contractor’s infringement was “for the United States” was authorized by the US).

Government Authorization: Although Gov’t authorization is generally narrowly construed, the appellate panel agree that the Government had authorized use of Sevenson’s patented method because Shaw’s written specifications called for use of those methods and those specs formed part of Shaw’s binding contract.

Holding: The lower court properly dismissed Sevenson’s claims. If Sevenson wants an award, it must pursue the US Gov’t in the Court of Federal Claims.

CAFC Denies Challenge to Patent Ownership

MyMail v. AOL (Fed. Cir. 2007).

Although patents assignments are registered at the USPTO, state law “governs the question of who has legal title.” Despite an earlier Texas court judgment on this issue, AOL challenged MyMail’s ownership of its patent — alleging fraud.  On appeal, the CAFC sided with the patentee, finding that the earlier Texas judgment settled the matter.  This decision should be seen as contrasting challenges to patent ownership (where prior decisions hold weight) with challenges to patent validity (which can be repeatedly challenged despite prior judgments affirming validity).

Based on a claim construction of the coined term NSP, the appellate panel also affirmed the lower court’s summary judgment of noninfringement.


Enhanced Damages: No ‘Prevailing Party’ after Rule 41(a) Voluntary Dismissal

RFR Industries v. Century Steps (Fed. Cir. 2007).

RFR holds patents covering a rubberized filler used on train-tracks that run over streets. The parties had a settlement agreement in place, but Century decided to stop payment — apparently believing that RFR’s claims were “barred by the doctrines of patent exhaustion and implied license.”

RFR sued.  Century answered the complaint and faxed a copy to RFR, but did not post a copy to the plaintiff.

RFR then got cold-feet and asked the court to dismiss the complaint without prejudice. Under the Federal Rules of Civil Procedure (R. 41(a)(1)), the plaintiff has a right to dismiss an action before the other side serves its answer or a motion for summary judgment.

In any event, the lower court didn’t allow RFR to dismiss the case — instead it granted Century’s 12(c) motion on the pleadings (with prejudice) and awarded attorney fees.

On appeal, the CAFC reversed, finding that Rule 41 “means what it says.” (applying 5th Circuit law). Because RFR had not been “served with the answer” it still had a right to dismiss its case.

So long as a plaintiff has not been served with an answer or a motion for summary judgment, the plaintiff need do no more than file a notice of dismissal to dismiss the case.

The CAFC also reversed the award of attorney fees, holding that a voluntary dismissal under R.41(a) does not result in a “prevailing party” as required by the enhanced damages statute (35 USC 285).

Microsoft v. AT&T: Unlicensed Export of Patented Software

With Microsoft’s reply brief filed late last week, briefing is likely over in the battle over interpretation of 35 USC 271(f). Oral arguments will be held this Wednesday (February 21, 2007). The case boils down the following statement:

Whether, by exporting the golden masters containing machine-readable object code from which foreign replicated copies were made in foreign countries, installed overseas in foreign-made computers, and sold to foreign end users, Microsoft “supplie[d] . . . from the United States” the “components of a patented invention” in a manner that induced “the combination of such components outside of the United States.”

What is the component? Why Microsoft believes it should win on either theory of component:

  1. If the component is the golden master itself, then it cannot be infringing because the golden master itself was not combined in an infringing manner as required by the statute.
  2. If the component is the object code . . .  well, object code cannot be a component because it is “an idea.”

As Hal Wegner recently noted in his widely-read newsletter, ”It’s Hardball!“ At oral arguments, two former Solicitors General will face-off Theodore Olson for Microsoft and Seth Waxman for AT&T.  [Updated] Anything involving patent law at the Department of Justice goes through Daryl Joseffer and his boss Thomas Hungar. Joseffer will be given time at the arguments.


  • Microsoft presumptively argues that these two suggestions for the ‘component’ are mutually exclusive. The do not, however, explain why both the golden master and the object code could be simultaneous components.
  • I agree with Microsoft that AT&T’s Moby Dick analogy doesn’t sit well. . .
  • All the briefs are available here.

Patent Reform: Tax Shelter Patents

On Friday, Senator Barack Obama (and former University of Chicago Law Professor) along with Senators Levin (D-Mich) and Coleman (R-Minn) filed a new bill to “stop tax haven abuse.” Included in the bill is a provision that would prohibit the USPTO from issuing patents for:

inventions designed to minimize, avoid, defer, or otherwise affect liability for Federal, State, local, or foreign tax.

The main focus of the Bill would be to “impose tougher requirements on U.S. taxpayers using offshore secrecy jurisdictions, give the U.S. Treasury the authority to take action against foreign jurisdictions that impede tax enforcement, stiffen penalties against abusers and close offshore trust loopholes.”

Please: No comments that are not about patents.


How Long Do I Wait for a First Office Action

DSC002151Based on the USPTO’s most recent numbers on examination, I created an updated table of the average delay until a first office action is mailed from the PTO. These numbers reflect an average for each technology center as it operates today.  The 3.8 year delay in Electronic Commerce (TC 3620) means that the applications receiving first office actions during the past three months were filed 3.8 years ago on average — taking us back to early 2003.  The numbers do not necessarily reflect how long it would take for an application filed today to make it through. (Although it is perhaps one of the better estimates that we have on hand.).

Average Time After Filing Before First Office Action
Tech Center Description Mths   Yrs
3620 Electronic Commerce 45.4   3.8
2140 Computer networks 40.0   3.3
2130 Cryptography security 36.4   3.0
2190 Interprocess communications 35.9   3.0
2160 Database and file management/ 35.0   2.9
2620 Television and TV Recording 33.5   2.8
2610 Digital Communications General 32.7   2.7
1740 Metallurgy 30.2   2.5
1610 Pharmaceutical formulations 29.9   2.5
1760 Food technology 28.9   2.4
2120 Miscellaneous computer 28.5   2.4
3730 Medical instruments 28.5   2.4
1640 Immunology receptor/ligands 27.5   2.3
2180 Computer architecture 26.9   2.2
2110 Computer architecture 26.6   2.2
1630 Molecular biology 25.9   2.2
3760 Body treatment 24.8   2.1
1620 Organic chemistry 24.1   2.0
3680 Machine elements 24.0   2.0
1710 Synthetic resins 23.5   2.0
3710 Amusement and 23.5   2.0
1750 Chemical products and 23.1   1.9
3630 Static structures 22.8   1.9
1650 Fermentation microbiology 22.8   1.9
1770 Stock materials and 22.2   1.8
3650 Material handling and 22.2   1.8
3750 Fluid handling and 22.0   1.8
1720 Fluid separation and 21.9   1.8
2890 Semiconductor Electrical 20.4   1.7
3660 Computerized vehicle 20.4   1.7
3720 Manufacturing devices 20.0   1.7
3610 Surface transportation 19.9   1.7
2820 Semiconductors and 19.7   1.6
3740 Thermal and 19.6   1.6
2830 Power generation and 19.4   1.6
2810 Semiconductors and 19.2   1.6
3670 Wells earth boring/ 19.2   1.6
2870 Liquid crystals 19.1   1.6
2950 Photocopying 18.8   1.6
3640 Aeronautics 17.8   1.5
1660 Plants 16.8   1.4
1730 Glass and paper making 16.0   1.3
2900 Designs 15.0   1.2

Prosecution Data: US Priority Date to Issuance

Last week’s pendency data used the application filing-date as its starting-point measuring pendency.  As a follow-on, I took the same set of 10,000 recently issued patents and obtained the earliest associated US priority filing.  As before, the average pendency for patents based on original applications was 40.4 months.  Patents that were based on a single provisional filing took about 10-months longer or 50.4 months. The 10-month difference for provisionals makes since since that is about the amount of time you would ordinarily wait to file the non-provisional.(n1) The time-in-process for continuations, CIP’s, divisionals, and patents based on multiple provisionals was much large — coming-in at 70.7 months.  Averaging these together, the average time from the earliest US priority date until issuance is just over four years (49.2 months). Medians are slightly lower than means because of the skewed nature of the data. (n2).

  • n1: The average delay from provisional filing to non-provisional was 11 months (334 days).  
  • n2: Skew can be seen in the histogram.

BPAI ‘Informative’ Opinion on Business Method Patents

I commented earlier on the continued transformation of the Board of Patent Appeals & Interferences (BPAI) from a somewhat secret organization to one that is engaging with and accountable to the public.

With the advent of publication of applications, the BPAI has become a more public body and continues to move toward the goal of providing sound decisions that both adjudicate the particular issues in question and provide further guidance to other applicants and examiners. [LINK].

Now, the Board has begun a new initiative publishing “informative opinions.” While not precedential, these opinions are selected because they are thought to provide useful guidance to both Patent Examiners and Practitioners. BPAI Informative Opinions;

Ex Parte Bilski (BPAI 2006).

The only 2006 opinion on the informative opinion list is Ex Parte Bilski. Bilski is a business method patentable subject matter decision that again flips Ex Parte Lundgren

The Board held in Lundgren that the “technical arts” test is not a separate and distinct test for statutory subject matter. Although commentators have read this as eliminating a “technology” requirement for patents, this is not what was stated or intended.

Bilski’s patent is directed at a method of managing risk at a reduced cost. The claims at issue are not tied to any physical structure; do not recite a physical transformation or any electrical, chemical, or mechanical act; and could be performed entirely by human beings without any outside aid. In its 71 page opinion, the board determined that the method was not statutory subject matter under Section 101, and prepared for a CAFC hearing:

In questionable cases, we feel that the public interest is best served by making a rejection. The Federal Circuit cannot address rejections that it does not see. . . . It would be helpful if the Federal Circuit would address this question directly.

(1) Mental Steps and Transformation: According to the Board, not every series of steps fit within the process requirement of section 101.  A section 101 process necessarily transforms some physical subject matter to a different state or thing.  A claim which can be entirely performed by a human can “be statutory subject matter if there is a transformation of physical subject matter from one state to another.” The claims here did not, however, provide any transformation of matter. Since the claim does not require a computer, there is not even an “implicit transformation of electrical signals from one state to another.”  The claims do recite a transformation “risk position” — but a non-physical transformation does not count.

(2) Abstract Idea: The Board considers the ‘abstract idea test’ to be a ‘backup’ to the transformation test — noting that “[t]here may be times where it is easier to analyze the subject matter as an abstract idea”  In this case, Bilski’s claims are both non-transformative and abstract.

Claim 1 describes a plan or scheme for managing consumption risk cost in terms of a method. It is nothing but an disembodied “abstract idea” until it is instantiated in some physical way so as to become a practical application of the idea.

Furthermore, the claim is also abstract because it covers “any and every possible manner of performing the [conceptual] steps. Thus, it can also be said that the claims ‘preempts’ the concept in the claimed methods.”

(3) Result that is Useful and Concrete and Tangible: If a method is abstract, it cannot have a concrete and tangible result because they are opposites. Concrete and tangible require “some sort of physical instantiation” that is not found here.  Likewise, although the claimed method may be useful in the business sense, “a method that has not been implemented in some specific way is not considered practically useful in a patentability sense.”

Concurrence by McQuade:

The quest for a bright line test for determining whether a claimed invention embodies statutory subject matter under 35 U.S.C. § 101 is an exercise in futility. . . . Per se rules or tests, while arguably easy to apply, simply do not afford the flexibility needed to keep pace with new developments in technology and the law.

Considered collectively, these are powerfully persuasive factual indicators (not tests) that the method recited in claim 1 is, at its core, a disembodied business concept representing nothing more than a non-statutory abstract idea. That the “initiating” and “identifying steps recited in the claim are drafted as acts required to be performed is of no moment. Given the full context of the claim, these acts are nominal in nature and merely serve to superficially couch the appellants’ abstract
idea in a method or process format.

Rejection affirmed.


Patent Reform is in the Air

On February 15, the House IP Subcommittee held a hearing on “The Case for Patent Reform.” All four seats at the table called for change:

  • Adam B. Jaffe, Professor and Dean, Brandeis University
  • Suzanne Michel, Chief Intellectual Property Counsel, FTC
  • Mark Myers, National Academy of Science (Former Xerox Exec)
  • Daniel B. Ravicher, Activist, PubPat


The key to more efficient patent examination is to go beyond thinking about what patent examiners do, to consider how the nature of the examination process affects the behavior of inventors and firms. To put it crudely, if the patent office allows bad patents to issue, this encourages people with bad applications to show up. While the increase in the rate of patent applications over the last two decades is driven by many factors, one important factor is the simple fact that it has gotten so much easier to get a patent, so applications that never would have been submitted before now look like they are worth a try. Conversely, if the PTO pretty consistently rejected applications for bad patents, people would understand that bad applications are a waste of time and money.


Unlike tangible forms of property, such as real estate, patent boundaries are almost always poorly defined. Many patents are written in vague or obscure language, claim construction procedures are uncertain and vary from judge to judge, existing claims are hidden in the pipeline at the Patent Office, and the use of abstract terms allows patents to cover far more technology than what was actually invented. One sign of how difficult it is for people to determine exactly what a patent does and does not cover is the fact that more than a third of all district court judges, after performing a thorough analysis of a patent’s claims, have their construction of those claims reversed by the CAFC.

If Federal Judges can’t agree on what claim terms mean, how can we expect the average American business person or individual inventor to do so. . . . .

[I]n order to address the problem of fuzzy patent boundaries, a patent’s validity should always be analyzed according to the broadest reasonable interpretation of its claims, because that is the construction of the patent that the public will generally abide by until the patent is reviewed by a court, and the currently dormant statutory prohibition against indefinite claim language should be awakened and strengthened.

Mark MyersMyers:

High rates of technological innovation, especially in the 1990s but continuing to this day, suggest that the patent system is not broken and does not require fundamental changes. Nevertheless [we should address] . . . consistent patent quality . . . harmonization . . . publication [of all filed applications] . . . [reducing] litigation costs . . . [and] patent thickets.

Michel [1][2]:

The [FTC] Report recommended creation of a new administrative procedure for post-grant review and opposition that allows for meaningful challenges to patent validity short of federal court litigation. Existing means for challenging questionable patents are inadequate. Patent prosecution is ex parte, involving only the PTO and the patent applicant, even though third parties in the same field as a patent applicant may have the best information and expertise with which to assist in the evaluation of a patent application.


  • I’m ignoring the HR977 that would end gene patenting because it is going nowhere. It would add the following language: `Notwithstanding any other provision of law, no patent may be obtained for a nucleotide sequence, or its functions or correlations, or the naturally occurring products it specifies.’.
  • S. 316, on the other hand, may get some legs. That bill would eliminate generic reverse payments. Leahy