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:

Pre-Lundgren:

Notes:

  • E.g., 20040138927, 20020095346.

10 thoughts on “Recent Business Method Patentable Subject Matter Rejections

  1. JumbaFig,

    I don’t think anyone is going to be able to tackle that for you in a short blog post. Read up on Festo. DOE has been pretty much killed by Festo. DOE is applied on an element by element basis rather than on some vague, invention as a whole basis. If you filed an amendment, the judge is free to declare that you have Festo’ed away your DOE rights in regards to a critical claim element. That’s the best I can give you in this short space.

  2. Can any body enlighten me more about the doctrine of equivalents? It seemed to be wrap up in a phrase “it’s up to the court”. Duh. But a bit more specification guideline will really be appreciated. How do you qualify “substantially the same” in business methods?

  3. With respect to the “common knowledge” issue above:
    First, I am an examiner but not in the business methods area. I am therefore unfamiliar with their specific practices (although I do take an interest in the question of what constitutes patentable subject matter).

    In our training, we are told that it is essentially not worth it to take official notice, i.e. to state that something is “common knowledge” or “well-known”. As stated above, applicant’s representative can always require that the examiner provide the evidence that a certain fact is in fact well-known. Essentially, we are told that since we may likely have to find the relevant reference in the future (i.e. when challenged by the atty.) we might as well find the reference now and cite it.

  4. from link to uspto.gov

    It is never appropriate to rely solely on “common knowledge” in the art without evidentiary support in the record, as the principal evidence upon which a rejection was based. Zurko, 258 F.3d at 1385, 59 USPQ2d at 1697 (“[T]he Board cannot simply reach conclusions based on its own understanding or experience-or on its assessment of what would be basic knowledge or common sense. Rather, the Board must point to some concrete evidence in the record in support of these findings.”). While the court explained that, “as an administrative tribunal the Board clearly has expertise in the subject matter over which it exercises jurisdiction,” it made clear that such “expertise may provide sufficient support for conclusions [only] as to peripheral issues.” Id. at 1385-86, 59 USPQ2d at 1697. As the court held in Zurko, an assessment of basic knowledge and common sense that is not based on any evidence in the record lacks substantial evidence support. Id. at 1385, 59 USPQ2d at 1697. See also In re Lee, 277 F.3d 1338, 1344-45, 61 USPQ2d 1430, 1434-35 (Fed. Cir. 2002) (In reversing the Board’s decision, the court stated “‘common knowledge and common sense’ on which the Board relied in rejecting Lee’s application are not the specialized knowledge and expertise contemplated by the Administrative Procedure Act. Conclusory statements such as those here provided do not fulfill the agency’s obligation….The board cannot rely on conclusory statements when dealing with particular combinations of prior art and specific claims, but must set forth the rationale on which it relies.”).

  5. If you are in the 3600 group, the only suggestion I can make is to appeal. I’ve had the opportunity to recently speak, very informally, with an examiner in that group, and the impression I got was that the culture in the 3600 group is to reject all applications (period). I was told that this examiner averaged 2 or 3 allowances a year, and that the examiner had to fight to get those cases allowed. I was also told that the number of allowances issued by this examiner was considered high for this group.

    As to the specific rejections, there is ample case law that requires an examiner to produce, upon request, evidence that something is “common knowledge” or “well known in the art.” I always request this evidence be provided. Moreover, with regard to KSR, there is a difference between asserting that the motivation to combine was well known/common knowledge, without evidence (the issue that may or may not be addressed by KSR), and asserting that the limitations themselves are well known/common knowledge.

    I think that the type/quality of rejections that you have seen is also symptomatic of the lack of a good initial training program (and ongoing training) for examiners at the PTO. Combine a poor understanding of the law and management that is looking for better quality (i.e., less allowances and more rejections … or at least that is how the PTO defines quality) and we’ll continue to see these types of rejections out of examiners. I don’t blame examiners so much for this situation as I do the management at the PTO, who is responsible for both training (or lack thereof) and these “quality” initiatives.

  6. I was recently asked to review a recent [THIRD and non-final and on new grounds] USPTO rejection received by another attorney on a business method patent applcation. I noted an unusual number of 103 rejections based on bare examiner statements of “taking judicial notice” “common knowledge” “well known in the art”, etc., without any cited art to back them up. Is this PTO-anticipatory of the Sup. Ct. decision in KSR, and/or symtomatic of how the PTO is accomplishing its indicated drastic reduction of allowance rates on applications in this area?

  7. Dennis, have you been digging through my files?

    With regard to your Example 1 (i.e., In re Warmerdam), I have seen that exact same language used. However, claims 9-18 were either method claims or system claims, which are clearly not disembodied data.

    With regard to your Example 2, the assertions are very claim dependent, so I cannot comment on the analysis. However, compare the discussion found in the second paragraph with what the majority opinion in Ex part Lundgren stated on page 7 (i.e., citing Musgrave, which disagreed that processes are non-statutory because some or all the steps could be carried out in the human mind)

    Regarding Example 3, whether or not the “document” was claimed alone (i.e., non-functional descriptive material) or as part of something else would be determinative.

    In Example 4, the Examiner referred to a single limitation. Without knowing anything else about the claim, I would cite M.P.E.P. § 2106(II)(A), which states:
    Finally, when evaluating the scope of a claim, every limitation in the claim must be considered. Office personnel may not dissect a claimed invention into discrete elements and then evaluate the elements in isolation. Instead, the claim as a whole must be considered. See, e.g., Diamond v. Diehr, 450 U.S. at 188-89, 209 USPQ at 9 (“In determining the eligibility of respondents’ claimed process for patent protection under 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made.”). (emphasis in original)

    As to Example 5 (i.e., Lundgren Contemporary), what is a user interface and a database but working devices? They may be embodied in hardware alone or software running on hardware, but they are neither abstract ideas nor descriptive material.

    As to Example 6 (i.e., Pre-Lundgren) … well, at least Lundgren cured those arguments.

    As to Example 7, with the exception of the very last line, I’ve seen this one (or ones very like it) many times. What exactly is a system?
    Is it a functional descriptive material? I don’t think so.
    Is it a law of nature? No.
    Is it a natural phenomena? No.
    Is it an abstract idea? No.
    In my mind, a system is either a thing (i.e., a device) having a particular function or a method of doing something.

    As for the system claim not containing a human being, I would have to see the claim before commenting. I wouldn’t see any problem with a claim which includes, for example, the limitation of a “graphic user interface for receiving input from a user.” However, even if a human being was part of the system, then that itself should not be dispositive since the presence of a otherwise non-statutory abstract idea (e.g., an equation expressing a law of nature) does not necessarily make the entire claim non-statutory. Instead, the scope of the claim, as a whole, must be considered.

  8. Sorry, I just can’t help myself:

    JUSTICE SCALIA: That, that code is not patentable, you’ve said.

    MR. WAXMAN: The code is not patentable.

    The expression is copyrightable. AT&T has not sought to get a patent on the code. AT&T has a patent on a system that can be practiced, among other ways, through the use of software.

    OK so no more “software is patentable and everyone knows it”… thanks. Just couldn’t resist.

  9. I especially love this:

    JUSTICE KENNEDY: But suppose, suppose you had a machine that makes another machine, and if you ship that machine to Europe — and there’s a patent for the machine that makes it. If you ship it to Europe and it starts making another machine, the statute is not violated; and isn’t that just what’s happening here?

    Actually, that is exactly what happens when source code goes to object code. A machine, the compiler, makes another machine, called object code through the mechanism of reading source code. So Kennedy has, quite accidentally, declared that sending source code overseas , where it is then compiled into objct code and distributed to NOT be violating the statute:

    Waxman is falling all over himself to declare that that is NOT what is going on:

    MR. WAXMAN: No, no, no. This is not a machine tool. The thing that was violated, the machine readable object code, is precisely what is installed on
    the computer and precisely what is moved from one part of the computer to another in different forms as the computer operates and it continually instructs.

    That is just hilarious. So object code is in violation, but source compiled overseas is not. I will keep that in mind. I have to go tell my friends.

  10. Well, ask and ye shall receive, thank you Dennis at Patently-O for producing an example of something the PTO thinks can’t be patented; I will have to look this over.

    Just in from the SCOTUS in M$ vs ATT:

    I am pleased to present the words of one Justice Steven Breyer; who today said he was afraid to give the ruling to ATT because infringement could then be interperted so broadly that “transmission purely of information” could be prosecuted as a violation.

    “I would be quite frightened of deciding for you and discovering vast numbers of inventions that can be thought of in the way you describe this one,” he said.

    Breyer used the example of someone reading the text of a patent claim over the phone to someone in foreign country who later decided to make the same product, a reading of the law he said “can’t be right,”.

    Which is exactly what I was saying earlier- that merely learning in an academic environment an algorithm then “exporting” yourself back to your country of origin would create grounds for infringement and have the effect of making such a person unemployable anywhere in the world. Of course it would. This is almost something out of a Python routine.

    Moreover, to those in this forum who have asserted that software patents are settled law and “the Supreme Court has already determined that software is patentable” as one poster insisted (hopefully, not a lawyer anyone was giving money to) or “there is no such thing as a “software patent” as another confident poster asserted, it appears that not only does Justice Breyer think there’s such a critter, but the matter has NOT been ruled on:

    “We’re operating under the assumption that software is patentable…but we’ve never held that in this court, ever, What should we do here?”, Breyer said, addressing Joseffer of the U.S. Department of Justice

    A system exists in which every software developer is responsible for every line of code or idea expressed in every claim in every patent ever published known or unknown to him and for ascertaining, through the opinion of a qualified attorney( because, in fact, as a matter of LAW, I, a non-lawyer CANNOT be said to be able to judge whether an invention infringes) whether some line of my. possibly vast source code infringes said claims and FURTHER not only am I responsible for each and every claim, which essentially functions as its own independent patent, but if I attempt in good faith to educate myself about their existence, I can be fined treble damages because, as a matter of law I cannot, as I said above, reach a conclusion one way or the other, however just having looked at some or any or one of the hundreds of thousands of patents I am responsible not to infringe is sufficient to have treble damages awarded to the patent-owner, should I be found guilty of infringement.

    There, Dennis, did I get that all right?

    No offense but you can see why software developers despise software patents and are adamant that if the country continues to act AS IF they they had been enshrined into law, which they have not, that software development will for all intents and purposes be brought to a standstill, or as one observer put it, if patents had been permitted earlier, we would still be in generation one of word processing and spreadsheets.

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