Bilski’s Patent Application

The Supreme Court is reviewing Bernard Bilski’s patent application to consider whether the application appropriately claims “patentable subject matter” under 35 U.S.C. 101 as interpreted by the Supreme Court. Much of the focus in the case is on the Federal Circuit’s exclusive “machine or transformation” test. However, I thought it would also be important to look at the underlying Bilski patent application because of how it may drive the debate at the Court.

Bilski’s application is not published. However, a copy of the 14-page application was included in a joint appendix submitted to the Federal Circuit during the en banc appeal. The application includes one independent claim; eight subsequent dependent claims; no drawings; and a priority claim to a 1996 provisional application. It appears that Buchanan Ingersoll (Pittsburgh) led the prosecution. The BPAI opinion rejected eleven claims – indicating that some amendments occurred during prosecution. (A docket sheet also indicates that drawings were later added.) Amazingly, Bilski’s case is based on an appeal from a March 2000 final rejection.

The Invention focuses on a method of managing consumption risk by commodity trading something that – in 1996 was “not currently managed in energy markets.” According to Bilski there was a “need for a fixed bill product to manage total energy costs including the consumption of risk.” The general idea of using commodity trading as a hedge against risk has been well known for years. However, Bilski proposes that consumers purchase commodities “at a fixed rate based on historical averages.” In a dependent claims, Bilski indicates that the risk to be avoided is a “weather-related price risk.” Later, that risk is drilled-down to focus on temperature shifts (heating and cooling degree days). Another dependent claim spells-out the equation for calculating the fixed cost based on prior fixed and variable costs, transportation costs, local delivery costs, and a location specific weather indicator. Additional dependent claims require specific Monte Carlo simulations and statistical tests to better calculate the fixed rate. In some claims, the commodity being traded is identified as “energy” and the market participants as “transmission distributors.”

The Claims do not focus on any particular machine or software implementation. Rather, they are organized as “methods” followed by a series of steps such as “initiating a series of transactions . . . “; “performing a Monte Carlo simulation . . .”; and “continuing to re-price the margin in the transaction until the expected portfolio margin and likelihood of portfolio loss is acceptable.”

No Machine: Even an amateur implementation of these methods would make extensive use of software and computer hardware. However, those elements are not present in the claims. Why did Bilski not include software and computer hardware in his application? My speculation: First, it does not appear – at least from the patent application – that he invented any software application of his hedging theory. Second, perhaps Bilski believed that a computer implementation element would unduly limit the scope of his invention.

Obvious and Not Enabled: The claims are likely obvious based on extensive prior art in the industry. In addition, the claims may well fail the tests of enablement and/or written description (if it survives Ariad v. Eli Lilly). However, the PTO worked-hard to properly couch this case as a test of patentable subject matter.

The abstract reads as follows:

A method is provided for managing the risk-associated costs of a commodity sold by a commodity provider at a fixed price. Such risk-associated costs include the weather-related costs of a fixed price-energy bill. The commodity provider initiates a series of transactions with consumers of the commodity wherein the consumers purchase the commodity at a fixed rate based upon historical averages. The fixed rate corresponds to a risk position of the consumers. The commodity provider then identifies market participants for the commodity who have a counter-risk position to that of the consumers. The commodity provider then initiates a series of transactions with the market participants at a second fixed rate such that the series of market participant transactions balances the risk position of the series of consumer transactions.

Read the application here: BilskiApplication.pdf

126 thoughts on “Bilski’s Patent Application

  1. Sorry for the delay getting back to you Mooney, but I was out actually having a life. You should really try it sometime, blogging as much as you do really warps your worldview.

    “I’m jaded enough…” true enough

    “The odds that the Republican Party will have “bounced back” in a meaningful way by 2010 are astronomically long.”

    Have you been readin’ the news lately Mooney? Heck, the Dumbs can’t even squeeze out 50% approval from their own kind. Keep those blinders on though. Let me know how that works out for you.

    “On the other hand, the odds that the Republican Party will become associated in the public consciousness with screaming homicidal racist nutjobs is quite high.”

    Guess Mooney didn’t read the story about the incident over at Harvard, I heard that it goes something like this – police officer with impeccable racial sensitivity credentials arrests belligerent black professor, president gets involved (surprisingly, given the other more pressing national issues) and plays race card in a supposedly post racial world. I guess when race shouldn’t be an issue and suddenly becomes one, we see who the real racists are.

    And the only nutjob around here is you Mooney.

    By the way, Nancy called, she wants you to return her red pumps.

  2. Paul Cole Wrote:

    “Do we really need over 100 posts to conclude that this is an undeserving patent?”

    No, we only need one post for that. Since what is and what is not an undeserving patent is a matter of opinion. Which is pretty much all we have in these anti bilski/patent rants.

    However, a pure process being statutory subject matter, IS a matter of the Law.

    And that requires serious discussion. I do note that out the 100 post no one could present any facts that demonstrate why Bilski’s invention is not a statutory process, under the law.

    Like I said before. Grant the gentleman his patent and let’s move on.

  3. I looked up the decision this evening in Ex Parte Gutta and read the claim the subject of Mr Mooney’s recent posting.

    I confess to puzzlement as to what the claim was all about. However, I was able to read it without nausea or any other physiological ill effect.

    Choking on your own puke is usually the result of over-indulgence in alcohol and unfortunately is a significant cause of premature death in young people, so perhaps not a fit subject for jocular remarks. Projectile vomiting, incidentally, might be a better image (if you must have an image of that type) and is less closely associated with a lethal outcome. Perhaps we should make our debates less emotional and more to the point, which in this case is the patentability of Bilski, not Gutta.

    Do we really need over 100 posts to conclude that this is an undeserving patent? I can read the Bilski claim without the nausea that troubles Mr Mooney. Puzzlement and sorrow are perhaps more appropriate emotions.

  4. 6 wrote:

    ” If it covers an embodiment that is pure mental steps then it goes out the window.”

    Okay, lets end this. Show me an embodiment, ( within or outside the specification) of Bilski’s claims that covers pure mental steps.

    ::The sound of crickets chirping::

  5. “…the very person whose intent we are attempting to determine by reading the specification and prosecution history.”

    Actually, as a matter of law this is NOT what we are attempting to determine by reading the specification and prosecution history. The subjective intent of the inventor is irrelevant – the real issue is what the specification conveys to one of ordinary skill in the art.

  6. AI it doesn’t matter if it is “limited to” mental steps. If it covers an embodiment that is pure mental steps then it goes out the window.

  7. “Yes, we should ignore the words of the applicant himself, the very person whose intent we are attempting to determine by reading the specification and prosecution history. ”

    Where in Bilski’s specification does he state or otherwise claim his invention is or should be limited to mental steps?

    ::One Troll Silenced::

    Next?

  8. Noise I’m making fun of people that try. That is, you et al.

    You never did get back to me on mah question from the other day, should I send you an email about it?

  9. and the worth of that patent, enforcing it on the particular, singular computer, (according to how you have described it) is…

    some fin wonderful attorney you would make.

  10. Broje, Idk about an examiner, but I might put “and doing the last steps of the method on your compouter” at the end. And be sure to make “compouter” singular. There you go, how imaginative am I? The claim is tied to a particular machine, in fact, only one machine, and, for all intents and purposes they said that usually the method would have the last steps performed on a computer, although it doesn’t require it. So, for practical purposes you get all the claim scope you need for the valuable part of the claim, and it is statutory.

    I would make a fin wonderful attorney. All you guys just have a hard time with drafting claims.

  11. “something tells me panic won’t reign in the skies because people suddenly can’t remember how to use the can.”

    Too funny. Thanks Dennis Miller.

  12. Actual Inventor Wrote:

    “Now that we all have the opportunity to read the actual specification in light of the claims, no one should be stating that Bilski’s claims are mental steps.”

    Michael Wrote:

    “I think it is funny that you think no one should state the claims only recite mental steps because, in fact, Bilski admitted his claims did not require a computer to the PTO (see Fed Cir case). ” Mr. Bilski admits his claims don’t require a computer so the claims are unpatentable as being mental steps – case closed.”

    Yes, Bilski did admit his claims do not require a computer or any machine at all. But that fact in itself does not mean a claim is a mental process.

    The CAFC in Bilski admited that physical acts would not make a claim non statutory. Bilski’s attorney stated before the CAFC that his claims required physical acts of communication.

    So your assumption that a claim without a computer is a mental process is wrong. No one says that. Not Bilksi, Not the CAFC, Not the SCOTUS. Not anyone. Not ever.

    Michael Wrote:
    “At a minimum, you must agree these are not the facts or software claims we want the Supremes to be reviewing.”

    Why not? The statute is very clear. Process is a separate and distinct category from manufacture, composition of matter and machine. The CAFC does not have the power to change the statute and effectively eliminate process as a separate and distinct category and neither does the PTO.

    The SCOTUS must deal with congressional intent and it’s own precedent. And if the SCOTUS can fix it, then “Actual Inventors” throughout the country will unite and make sure congress does.

  13. Actual Restroom Reservationist wrote:
    “Now that we all have the opportunity to read the actual specification in light of the claims, no one should be stating that Bilski’s claims are mental steps.

    He gets his Patent, case closed.”

    Yes, we should ignore the words of the applicant himself, the very person whose intent we are attempting to determine by reading the specification and prosecution history. And it’s “read the claims in light of the specification” not vice versa, even though you wish it was the other way around.

    After SCOTUS pimpslaps Bilski, and a couple hundred thousand abstract method patents go up in smoke, something tells me panic won’t reign in the skies because people suddenly can’t remember how to use the can.

  14. Hah hah, the pretentious windbagging has no end. Bottom line, software innovation IS a type activity that the patent laws were intended to encourage. Even the dustiest crustiest Supreme can realize that as he/she types away on his/her computer, googling, editing, emailing, background crunching data for SETI, or whatever. Using 101 to help filter out junk applications is not the way to go.

  15. “Mr. Bilski admits his claims don’t require a computer so the claims are unpatentable as being mental steps – case closed.”

    B-b-b-but he initates a tr-tr-tr-transaction!!!

    /appellant off

  16. Ok,I challenge you to rewrite those claims in a way that:

    a) passes muster under Bilski;
    b) still catches all of the infringers; and
    c) meets with Mal Cum Looney’s approval.

  17. Actual Inventor Wrote:

    “Now that we all have the opportunity to read the actual specification in light of the claims, no one should be stating that Bilski’s claims are mental steps.”

    I think it is funny that you think no one should state the claims only recite mental steps because, in fact, Bilski admitted his claims did not require a computer to the PTO (see Fed Cir case). I understand that you may disagree with Bilski’s reading of his own claims in light of his own specification, but I do not believe you can state that his reading was unreasonable and no court could agree with him.

    What would bother me more is if you are advocating that the courts should simply ignore his admission before the PTO. Mr. Bilski admits his claims don’t require a computer so the claims are unpatentable as being mental steps – case closed.

    At a minimum, you must agree these are not the facts or software claims we want the Supremes to be reviewing.

  18. How can this Malcolm be the same one that bitterly complained about gratuitous commenting? Honestly?

    Who instigated politics? Hint: see the post at 3:08 PM

    Who has the legal/logical argument of – if you believe that, you must be one a certain number of ill-begotten entities? Hint: see the post at 3:28 PM

    When called on the carpet for his own shenanigans, Malcolm plays the wounded innocent. Calls for integrity and honesty from this Malcolm – can those calls ring anything but hollow?

    And someone recently posted that Malcolm doesn’t get the respect he deserves on the trainwreck-O. Well, yes, that poster is probably correct, but likely NOT in the complimentary fashion of one examiner to another.

    Here at the trainwreck, more of the same from Malcolm.

    Nice crash though.

  19. Broje: You totally ignored the 2nd part of challenge.

    My point is that you can re-write claims to be statutory under Bilski AND still catch all the infringers you could possibly catch with it written otherwise, while avoiding mind-thought infringers.

  20. I’m jaded enough to understand now that rants like Blimpy’s are not parody, even here where you’d expect folks to have a decent number of years of post-high school education.

    The odds that the Republican Party will have “bounced back” in a meaningful way by 2010 are astronomically long. On the other hand, the odds that the Republican Party will become associated in the public consciousness with screaming homicidal racist nutjobs is quite high. A clever inventor could be filing patent applications exploiting this future circumstance right now.

  21. “You must be a Republican”

    What with our Marxist-in-chief Obaminejad’s ratings and the Dumbocrats’ ratings dropping like stones every day, I’d say that “you must be a Republican” would be a sincere compliment.

    It will be an even great compliment next year my bitter little socialist friend.

  22. “If you can read the claim in Ex Parte Gutta without choking on your own puke, then you are either a troll, clueless, or deeply invested in The Game.”

    More salient commentary from the biggest, most clueless, pukerific troll who is clearly not invested in anything except trying to bother real patent attorneys at PatentlyO.

  23. If you can read the claim in Ex Parte Gutta without choking on your own puke, then you are either a troll, clueless, or deeply invested in The Game.

  24. “If you have to physically take action then you are no longer merely thinking or performing mental steps.”

    That analysis is right up there with the “on an airplane” approach to sidestepping the Fed Cir’s particular machine test, i.e., worthless.

    “Thats the only way Bilski does not get his patent. And if that happens, especially in this economy, God help us all.”

    LOL. The meltdown was brought to you by people pretending to “innovate” ways to change numbers to “improve” a “bottom line” on an accounting sheet. You’re saying we need more of that? You must be a Republican.

  25. And below is the one form Ex Parte Gutta. I think that, with these claims, it is easy enough to identify an infringer. I’m not sure what you are talking about in the second part of your challenge, or whay that would matter. Will you do the analyes for me?

    1. A computerized method performed by a data processor for recommending one or more available items to a target user, comprising the steps of:

    obtaining a history of selecting one or more available items by at least one third party;

    partitioning a third party selection history into a plurality of clusters, wherein each cluster contains items that are closer to
    the mean of the cluster than any other cluster from among the plurality of clusters;

    modifying a target user’s history of selecting said one or more available items with one or more third party clusters to produce a modified target user’s history;

    processing the modified target user’s history to generate a target user profile, wherein the modified target user’s history characterizes preferences of the target user as modified to
    reflect preferences of the third party;

    generating a recommendation score for at least one of said available items based on said target user’s profile; and

    displaying the recommendation score to the target user.

  26. Michael Wrote:

    “Since Bilski’s claims did not require a computer (and he has admitted this), shouldn’t they simply be rejected out of hand by the prohibition of claiming mental steps?”

    Now that we all have the opportunity to read the actual specification in light of the claims, no one should be stating that Bilski’s claims are mental steps.

    Bilski’s claims require physical acts to actually reduce to practice. If you have to physically take action then you are no longer merely thinking or performing mental steps.

    Look, let’s get this. Everyone by now knows, including the flaming anti patent trolls and alleged rogue gangsta bad a&% junior examiners of this blog, that Bilski’s application is statutory under current law, ratified by congress in 1952, and interpreted and upheld by the Supreme Court for over 50 years. Bilki’s invention is a process, a series of acts or steps to be taken. He gets his Patent, case closed.

    So what’s all this wrangling about? Simple,what the aforementioned characters hope is that the SCOTUS will ignore congressional intent and their own precedent and rewrite the patent laws from the bench in a way congress never intended. Thats the only way Bilski does not get his patent. And if that happens, especially in this economy, God help us all.

  27. “I challenge you to conjure up one example of a claim that:
    a) Doesn’t pass the current Bilski, would pass the prior 101 standards, and that you could prove infringement for a certain infringing X; and
    b) Does not have an alternate claim construction that i) passes the current Bilski; and ii) covers the same certain infringing X.”

    I’ll bite.

    How about the claim from Ex Parte Nawathe et al., that the BPAI determined was unpatentble due to Bilski:

    1. A computerized method comprising:

    inputting multiple extensible Markup Language (XML) documents;

    creating a data representation of said multiple XML documents; and

    reducing redundancy across said multiple XML documents via a fixed set of tables.

  28. Since Bilski’s claims did not require a computer (and he has admitted this), shouldn’t they simply be rejected out of hand by the prohibition of claiming mental steps?

    Since Bilski’s claims are therefore not software claims, isn’t any ruling the Supremes make regarding claiming software simply dicta?

    Personally, I think Bilski’s claims were not very good and definitely not the claims that should be reviewed by the Supremes. Bad claims often result in bad caselaw, but hopefully that doesn’t happen.

  29. “Eventually, someone was going to throw out that hackneyed argument.

    The problem with your scenario is that nobody can prove infringement — unless, of course, the person allegedly performing the claimed method admitted that they were performing it, which is an unlikely scenario.”

    On the flip side of the coin, the only time you could prove infringement would be if the infringer performed a method covered by a claim that wouldn’t be rejected under the current Bilski Rejection Enforcement Criterion. Touche.

    I challenge you to conjure up one example of a claim that:
    a) Doesn’t pass the current Bilski, would pass the prior 101 standards, and that you could prove infringement for a certain infringing X; and
    b) Does not have an alternate claim construction that i) passes the current Bilski; and ii) covers the same certain infringing X.

  30. MLS “I expressed no opinion re 102/103/112 as they pertain to Bilski et. al., so your generosity is unnecessary.”

    Well, implicitly you did express such an opinion by suggesting that there was “knowledge” contained in the specification that wouldn’t otherwise by “promulgated” in a timely manner. I have not heard a credible argument that this is the case with Bilski’s specification.

  31. Malcolm Mooney, Aug 12, 2009 at 12:52 PM

    I expressed no opinion re 102/103/112 as they pertain to Bilski et. al., so your generosity is unnecessary.

    As for “progress”, I prefer to ascribe to it the general meaning when the first patent and copyright acts were enacted…the promulgation of knowledge to others.

  32. “Jules has distanced himself (herself?) from the ridiculousness of 6, much to his credit.”

    He simply hasn’t witnessed the true power of the dark side!

    “Cmon, 6, do we need to revisit Allapat one more time”

    I don’t know, do you need to be stfu one more time? If so, yes. If not, no.

    The En banc majority opinion has 0 to do with an off hand comment regarding what had already been allowed by them. MoT changes the game. Any prosecutor with half a brain knows it. People like Gene sweat bullets, and thank god they can get their claims by examiners, who never read the decision, with “computer”, not really caring that the claim will die years later.

    If you were half as smart as Gene (not a difficult feat of intellectualism) you’d be scared half shtless for your claims relying on general purpose computer nonsense. Especially now that the USSC’s finger is on the trigger.

    I can’t wait to see the transcripts of the oral arguments and the 50+ pages of what is going to be sweet sweet Noise qq inducing judicial smackdown.

    You want to go to the oral argument? Is it open to the public? How do you get tix to the USSC?

    Noise you never did get back to me about your position on BRI I don’t think. Don’t be bashful, I’m betting you probably agree with abolishing it don’t you? Crazy girl.

    “Who knows, I may even be DC (?!)”

    You know know who knows. I know, and DC knows too. You’re not DC.

    And btw, I’m not that guy who is trashin Gene above. I’m surely not the only one who disagrees with banning for anything other than straight trash talk all the time anytime. And, again, Noise, I was banned because he disagrees with a supposed position of mine, that ind inventors shouldn’t get an attorney. As well as the subsequent stealing of bread straight out of his families poor kitchen. Obviously I didn’t say that, nor do I believe it.

    Perhaps Gene has been on the ball banning more people. I was wondering why the comments over there took a nosedive. You used to see threads with 30, 40 comments. Now you might see 10. Guess there isn’t much to say when everyone agrees.

    “Not true. Gene doesn’t like people attacking his patent application (US 2007/0055560) on his website, which recently received an office action in which all claims were rejected — both 101 and art rejections.”

    LOLOLOLOLOLOLOLOLOLOLOLOLOLOL

    But then again they are “reasonably anticipated” by his own admission. I wonder if his admission could be used as admitted prior art? If you admit, in writing that your claims are reasonably anticipated, does that invalidate the claims?

  33. “To drive subject matter such as embodied in Bilski et al. into a cloak of secrecy is in my view antiethical to “progress” as that term is used in Article 1, Section 8, Clause 8.”

    Would the same argument apply to IBM’s method of relieving a bladder on an airplane patent? Or is there something about Bilski that deeply impresses you?

    Because I’m not seeing anything “progressing” after Bilski’s disclosure, except the ability of energy companies to make more money (assuming the invention isn’t obvious crap, which is being very generous to you). Is that “progress” in your view? Because if that’s your goal, patents are really the lamest way of going about it.

  34. Noise, if you chide me (repeatedly) and my earlier active contributions to Crouch threads with

    “thought…should…precede action” (my dots added)

    I have to take it, from your own words, now reiterated, that action isn’t necessarily, every time, preceded by thought.

    So, how you come to

    “in direct contradiction”

    I don’t know.

    But I think we can agree, not to clutter this thread with bickering. Let’s debate the issues that other readers want to debate. You write:

    “I haven’t thought about it and thus will not comment”

    which (I think) is very sporting of you.

  35. “If a group of you conspire (i.e., think about and talk about) to commit an offense against the US and just one of your group commits an act in furtherance of that offence, all of you could be liable under 18 USC 371, even all of you did nothing more than think, talk, nod.”

    No they acted; they agreed. They therefore can be liable based on objective standards. Bad analogy.

  36. Quite frankly I am surprised at the number of above comments that are prepared to slam shut the “101 Door” on entire classes of subject matter that serve a very useful purpose in the real world using catch phrases such as “it is a mental process”, “anyone can do it with pen/pencil and paper”, “My God, just thinking about it may make me an infringer”, etc.

    While many may pooh-pah (sp?) the notion, I still happen to believe that disclosure is one of the fundamental priciples underlying patent law. To drive subject matter such as embodied in Bilski et al. into a cloak of secrecy is in my view antiethical to “progress” as that term is used in Article 1, Section 8, Clause 8.

  37. “Although Noise would beg to differ, thought precedes action.”

    And we were getting along so nicely…

    Actually and quite clearly, in direct contradiction, my stance has been that thought should precede action.

    As to the hypothetical under discussion, I haven’t thought about it and thus will not comment.

  38. Although Noise would beg to differ, thought precedes action. If evidence would be available, to prove that the Defendant did indeed act in a particular way (perhaps by procuring a particular test regime, inspecting the results issuing from it, then prescribing a course of medical treatment), we would be able to infer, with a likelihood bordering on certainty, that during those proven acts the infringing thoughts MUST indeed have been thought. That would be enough to prove, in a civil action, that infringement of the patent in suit has indeed taken place, by thinking those infringing thoughts.

    Asinine? I wonder.

  39. “Gene does run a tight ship at the IPWatchdog, but does not ban people for disagreeing with his position. In fact, he openly invites those with counter positions and the willingness to put forth reasoned debate.”

    Not true. Gene doesn’t like people attacking his patent application (US 2007/0055560) on his website, which recently received an office action in which all claims were rejected — both 101 and art rejections.

    Regardless, anybody that bans 6 is OK with me.

  40. “It’s the principle that you could legally exclude anyone in the US from thinking certain thoughts.”

    If a group of you conspire (i.e., think about and talk about) to commit an offense against the US and just one of your group commits an act in furtherance of that offence, all of you could be liable under 18 USC 371, even all of you did nothing more than think, talk, nod.

  41. “So by just sitting around, thinking, and talking to my friends, I could infringe your patent. By thinking, I could infringe your patent. Me, thinking to myself, could infringe your patent.

    That would be very, very bad.”

    Eventually, someone was going to throw out that hackneyed argument.

    The problem with your scenario is that nobody can prove infringement — unless, of course, the person allegedly performing the claimed method admitted that they were performing it, which is an unlikely scenario.

    Sorry for the Sci-Fi fans out there, externally reading minds to the the degree of particularity needed to establish infringement likely won’t happen in our lifetimes.

    When you are forced to make an argument that has no real-world relevance, it means that you are running out of good arguments to make.

  42. Perhaps “Murph” is another pseudonym for “6”, as 6 is the only person I know that actually has been banned from Gene Quinn’s site for being blatantly wrong (nice subtle cry for Uncle, 6).

    Gene does run a tight ship at the IPWatchdog, but does not ban people for disagreeing with his position. In fact, he openly invites those with counter positions and the willingness to put forth reasoned debate.

  43. ” Dennis provides the articles but has little interaction in the comments, ”

    Murph, you clearly have not been paying attention. Drop and give me 20.

  44. Are you being sarcastic? I don’t care that it’d be near impossible to enforce that type of infringment. It’s the principle that you could legally exclude anyone in the US from thinking certain thoughts.

    It’s asinine.

  45. Here’s why everyone should love the current Bilski decision: Potential infringement.

    Assume the current Bilski decision doesn’t exist. This would allow people to get a patent that claims something that could be interpreted as being performed completely mentally, physically, verbally, etc, by a human being.

    So by just sitting around, thinking, and talking to my friends, I could infringe your patent. By thinking, I could infringe your patent. Me, thinking to myself, could infringe your patent.

    That would be very, very bad.

  46. I enjoy the trainwreck. I like the fact that no matter what one’s position is, others are free to call BS on it if they disagree. It’s what sets this blog apart from others that are little more than a podium for the blog author’s views (cough – Eugene Quinn – cough). Dennis provides the articles but has little interaction in the comments, which I think is a good thing. Of course, Blimpy will construe that statement as a smokescreen to hide my true identity: Elvis. Anyway, DC, keep up the good work, and everyone else keep commenting (except Noise).

  47. This idea that algorithms need to be connected to an apparatus is ridiculous. This claim appears to be obvious but should never have been rejected under 101.

  48. “”No book on Monte Carlo simulations would describe the hardware (computer) it used to implement the simulation.”

    Really? Would you like to bet on that?”

    I would Malcolm if you modified it to most books.

  49. Noise above the law wrote:
    >>there is plenty o’ trainwreck still here at >>the O,

    You have definately improved the blog. 6 M & M’s had almost driven me off the blog.

  50. “Jules appears to be…”

    Thanks for the kind words. Let me give a shout out to you too Noise. You’ve helped me see areas for improvement, and control my temper a little bit. Regarding the inane points, let’s just remember that humor is a good thing. Regarding the himself/herself thing, let’s just say I was considering writing one of those Real Men of Genius songs about myself.

  51. Good point Interloper. Germany used to have “technical progress” as a criterion of patentability. But that was abandoned as unhelpful, a generation ago. Perhaps SCOTUS will now explain to us what’s wrong with the present European champion “technical character”. Aharonian has been trying (pun intended) for years, but fails to convince. SCOTUS, in aggregate, has more brainpower though, and Duffy is feeding it arguments that it might find attractive.

  52. Be careful, MM. You don’t want your good arguments about appropriate limits of patent subject matter to be sideswiped by a subjective ‘is this really progress’ test.

  53. Jason, when I say “worthless” I mean “worthless” from the viewpoint of promoting progress in the useful arts. Presently our “financial markets” are so “revolutionized” that people are able to make millions of dollars simply by exploiting their proximity to the stock exchanges and/or their possession of marginally faster computers. Is this “progress”? I suppose the same argument could be made (and probably was) that steroid “revolutionized” baseball. Did it represent a step forward in the sport?

  54. Blimpy,

    I do not think that the Jules pen name is a pseudonym for any multi-blogger.

    Jules appears to be an examiner, and in my ever so humble opinion has shown considerable growth over the past year. Sure, Jules will throw out some seemingly inane points now and then, but seems earnest about learning. In fact, in some recent comments, Jules has distanced himself (herself?) from the ridiculousness of 6, much to his credit.

    That said, there is plenty o’ trainwreck still here at the O, and I’m happy to contribute my share. Who knows, I may even be DC (?!)

    6, still with the same rope: “Not if the CAFC doesn’t consider a gen purpose computer particular. Just because the board or examiners are letting you get away with it right now doesn’t mean much.”, Cmon, 6, do we need to revisit Allapat one more time?

  55. Malcolm Mooney:” … But it’s utterly irrelevant to the 101 issue which is that a method of “managing the risk of transactions” is a non-transformative intangible abstraction no matter how it’s accomplished. … 101 has a purpose and it’s to keep this worthless garbage out of the system.”

    Malcolm, don’t hold yourself back so much, what do you *really* think about intangible abstractions?

    I don’t really disagree with you, but your words sting my eyes a bit. Before flushing all “intangible abstractions” into the toilet, remember that the 1973 Black Sholes equation link to en.wikipedia.org revolutionized the financial markets and allowed investors to, for the first time, objectively price calls and puts. Trillions of dollars are put on the table each year largely on the basis of this mere abstraction. If you have a 401(k) retirement plan you are probably indirectly using it too.

    But why did it take SO LONG for someone to derive this equation? We had already gone to the moon and solved quantum physics by 1973. Well, perhaps its lack of incentive.

    I don’t know that the inventors of this equation profited from it. Dr. Black was just a professor. He got fame from publishing the equation, but he died of cancer pretty early on. Scholes eventually got a Nobel prize to stick on his mantle, but only after his hedge fund lost $4.6 Billion trying to apply the equation.

    What if we moved the present case law backwards in time, and allow Black and Scholes to apply for a software patent back in 1973 instead of simply publishing it? Well, as an aside Scholes could have “trolled” (i.e., licensed) his equation instead of trying to implement it himself, and perhaps wouldn’t have lost billions.

    But if you are their attorney, you’re going to make them tie it to a real “tangible” computer, right? Well, interestingly enough, back in 1973, slide rules still “ruled” (pun intended) in most parts. The programmable TI59 link to en.wikipedia.org could handle the BS equation, but it didn’t come out until 1977. For that matter, if we slide into the future instead of back into the past, whose to say computers of the future aren’t “computers” as we know them now?

    With a few years of discussion on the issue, and 40+ amicus curiae briefs to wade through, I have faith scotus will churn out something reasonable, but in the mean time, please don’t diss “abstractions” too strongly.

  56. “The 101 issue boils down to the formality of reciting a general purpose computer as part of the claims. ”

    Not if the CAFC doesn’t consider a gen purpose computer particular. Just because the board or examiners are letting you get away with it right now doesn’t mean much.

  57. The 101 issue boils down to the formality of reciting a general purpose computer as part of the claims. This sort of formalism adds no knowledge to how the invention works. Monte Carlo simulations, error correction codes, genetic optimization routines, etc. rarely if ever discuss the hardware on which they are implemented in the technical literature. Bilski forces this artifice onto claim language and turns patent law into legal gamesmanship. The only winners are technology thieves – who do no promote the progress of the useful arts.

  58. A great read about WD.

    link to jnahikian.startlogic.com

    Moore was never an examiner, and I’ve forgotten if Michel or Dyke were. In any event, better get that evidence of support for your amendments in before you get past the board. At least if you draw this panel.

    I have to say though that I disagree with them restricting evidence going into a DC action.

    This case is a bit ridiculous though. Either there is, or is not support. This should not require much more evidence than the spec itself. At the very worst this whole thing should have been resolvable in an interview of no longer than an hour. Maybe 2 since there is a lot of individual issues.

    If he just wants to get more evidence in, why not just file an RCE, amend the claims to something completely bogus, then after the first action final comes (lawlz), file another RCE and amend them back to what he wants originally, then file the “evidence”. Simple. Total cost $2k, or $1k dollars if no first action final occurs.

    Why do some people suck at prosecution?

  59. It is difficult for some people to realize this MM. They see some words on a paper and think “well by golly, there’s a whole lot going on right thar!” “I wonder if anyone ever thought to do that :/?”.

    We should simply declare some things unexaminable, and thus unpatentable, as a practical matter and be done with this mess. Of course, the unintended consequences of that would be far reaching. Should have been done long ago so we wouldn’t feel the effects quite so clearly today.

  60. “I think a key difference between a Fixed Bill plan and a Levelized Payment plan as described in the NYT is that there is a charge at the end of the year in a levelized plan that reconciles what was billed for the year and what was used. A Fixed Bill plan doesn’t do that.”

    But until the end of the year, there is no difference in outcome because the bill is “fixed.” (I believe this is Blimpy’s point at 5:28) This is one of may problems with the Bilski claim and it is a key one: both patentability and infringement analyses hinge on the processing (mental or otherwise) of numerical abstractions whose only tie with reality is a number on an invoice (itself an abstraction).

  61. Glad to hear it, I was a little concerned whether the article was real.

    But with regard to your attempt to distinguish the Bilski claims from the levelized payment or similar plans that have existed for a long time, it seems to me that, whether the actual usage amounts are reconciled at the end of the period or not (and I’m sure in some plans they are not provided that they do not exceed some threshold amount), given the scope of the claims, if an upstream fixing can take place, which it most certainly can and does given that the accounts are reconciled in a period when demand and upstream pricing have subsided, then the claimed method seems to read on such a scheme.

  62. Blimpy, you speak as if that’s a bad thing. Incidentally, I don’t think you’re seeing the big picture. By the way, you’re the delusional one. Funny how you tried to turn that around on me. Let’s say for argument’s sake that someone like MM changes their pseudonym around from time to time. Tell me this – who cares?

  63. Incidentally Mark, that link was to a link to the full article, you have to be a subscriber to get the full content apparently.

  64. Blimpy

    Super NY Times reference. I’ll go ahead and add it to the article. For the record, I think a key difference between a Fixed Bill plan and a Levelized Payment plan as described in the NYT is that there is a charge at the end of the year in a levelized plan that reconciles what was billed for the year and what was used. A Fixed Bill plan doesn’t do that. What you pay is independent of what you use. That’s why you have to hedge the risk as Bilski et al. claims.

    Regarding your earlier comment, “tell me how the negotiation of the purchase and sale of a simple futures contract and associated futures exchange transactions does not amount to the “fixed billing” of Bilski?”

    It probably hangs on what the word “identifying” means in step b of claim 1. In a futures market, (as I understand it), counterparties self identify. What Bilski et al. appears to mean, however, is that the market maker (e.g. commodity supplier) actually does the identification. Not so easy considering, as Bilski et al. explains, that counterpositions are location specific due to regional variations in weather. That means that there is residual unhedgable risk that has to be minimized. That’s where Bilski et al.’s Monte Carlo simulation comes in. It’s not perfect, but it may be good enough to meet a utility requirement.

  65. “You should know “Jules””

    Not sure what kind of game you’re trying to play with me, but yes, I should know. In my short time here, I have spent a good amount of time bouncing around between different blogs. I’m just being honest. Sorry if I touched a nerve.

  66. To Mark Notowarski,

    I don’t have anything sitting here in my back pocket, but I would like the think that the examples I did provide might lead you in a fruitful direction. If I just handed you something there would probably be a price tag attached.

    However, there are references to “Levelized Payment” plans and “Budget Billing” plans that abound. Here is a NYTimes article that is dated 1984

    link to nytimes.com

    However, please check all dates and other facts for correctness.

  67. “How’s that working out for you?”

    Not sure what you mean by that, but I’ll go with “enlightening”. Frankly, I am suprised that anyone in patent law can go without keeping up with the blogs. That includes the most high-ranking people in the field. You can learn a lot on these blogs. It can also consume a good amount of time.

  68. I’ve been coming around for a couple of years now. I’ve seen the supposed “puppet show,” but my belief is that people that toss around such accusations are crazy or just not accustomed to accepting the situation of anonymous blogging. On a related note, anonymous blog law is an interesting area of law, especially considering the recent PTT case.

  69. “Who exactly is “us” and “we”? ”

    Pretty much everyone, besides you, who reads the comments on a regular basis.

  70. I guess if you weren’t so nervous “BigGuy,” you wouldn’t feel the need to address this issue, not to mention put up the smoke screen.

  71. You must have just arrived here “Jules”

    When you have been watching the puppet show for a long time, you see who is pulling the strings.

  72. Blimpy is falling helplessly into the same delusions that so many others have before. I do not think “conspiracy theorist” is the appropriate word. Maybe a new word is appropriate, for those who irrationally believe that one person is repeatedly changing their online psuedonym. That’s not to say that some people don’t change their name, but to go around accusing people of such is just setting yourself up to look foolish.

    Also, Blimpy, you forgot to provide a teaching, suggestion, motivation, or any other well thought out rationale as to why you believe what you do.

  73. “Most of us can easily see through your smokescreen… all the way through. Its as if we can see you typing feverishly at your keyboard.”

    Who exactly is “us” and “we”? It’s kind of cute how you apparently think you speak for more than just yourself.

  74. Sorry BigGuy,

    Most of us can easily see through your smokescreen… all the way through. Its as if we can see you typing feverishly at your keyboard.

  75. To Mark Notawarski

    Tampa Electric is just an example of the kinds of programs that have been around for a long time. Residential gas companies have, for decades, offered fixed billing programs. While, I don’t have a ready link that was found in under 2 seconds, it is not impossible to imagine that similar programs have long existed for upstream transactions, particularly given the broad recitation of “commodity.”

    To make it even simpler, tell me how the negotiation of the purchase and sale of a simple futures contract and associated futures exchange transactions does not amount to the “fixed billing” of Bilski?

  76. “In case you haven’t figured it out BigGuy = Mooney”

    And Mooney = DC = 6k, so BigGuy = 6k.

    Does Blimpy = ASE = Cave?

    Actually, in case you haven’t figured it out, BigGuy is smart enough to simply ignore Mooney.

  77. “For example, look at all the CAFC panel decisons straining or stretching to find non-infringment of flaky-looking patents because so often that is the only issue on appeal these days.”

    OK. Which ones?

  78. “Maybe the USSCt would raise novelty/obviousness sua sponte, but they would have to go farther back in the record than the CAFC decision to do that — i.e., unlikely.”

    If they want to weasel out of the 101 issue then that becomes much more likely. They probably do want to weasel out of it.

    And guys, for those of you that don’t know, “monte carlo” could be performed by hand.

  79. David Kappos swearing in this thursday in front of madison at 12. If you don’t be an arse they’ll probably let you come and watch.

  80. Blimpy,

    Tampa has an interesting program, but it’s not clear to me how it anticipates a “Fixed Bill” pricing program. In a fixed bill program, a customer pays a fixed dollar amount per month for energy, no matter how much they use. The dollar amount is based on their historical usage.

    Did I miss something?

  81. Re: “There are no 102 or 103 issues here. Period. Prior art is irrelevant. Novelty is irrelevant. Obviousness is irrelevant.”
    All very true, legally. However, to suggest that such an impression cannot influence judges opinions on other legal issues that ARE on appeal is not being psychologically realistic. For example, look at all the CAFC panel decisons straining or stretching to find non-infringment of flaky-looking patents because so often that is the only issue on appeal these days.

  82. A cursory search of the Internet reveals the following:

    “With the help of an advanced programmable thermostat, Energy Planner lets you control the operation of one or more central heating and cooling systems, electric water heaters and pool pumps when varying prices for electricity are lower than the average price customers pay under the residential service rate. There is no cost to participate in the program and you have the opportunity to lower the cost of your electric bill.

    Tampa Electric began its energy-efficiency program initiative in the late 1970s, prior to any federal or state energy-efficiency requirements. Almost 400,000 customers have participated in the company’s energy-efficiency programs to date.”

    It seems to me that Tampa Electric’s Energy Planner program, which has a separate site at link to tampaelectric.com, is but one example found in about 1.5 seconds.

    Since the late 70’s – I’m guess that would be earlier than 1995.

  83. “They’ve been doing this (and offering this service to residential consumers in the northeast) for many years now (since at least the early 90’s).”

    Patent medicine.

    If you can find a reference that predates Bilski’s reduction to practice in 1995,I’d love to hear about it. In fact, just go ahead and add it to the Fixed Bill Wikipedia article referenced above. link to bit.ly

  84. “I doubt that a Monte Carlo simulation has been used to set prices for a commodity before the filing of this patent application.”

    I doubt that setting prices for a commodity using a Jungholze-Kleinhammer simulation was ever proposed before today. But it’s utterly irrelevant to the 101 issue which is that a method of “managing the risk of transactions” is a non-transformative intangible abstraction no matter how it’s accomplished. Like a method of pushing a swing to avoid frightening a child, or a method of organizing a queue so nobody takes a leak in their airplane seat, this is unpatentable crap. 101 has a purpose and it’s to keep this worthless garbage out of the system.

  85. “No book on Monte Carlo simulations would describe the hardware (computer) it used to implement the simulation.”

    Really? Would you like to bet on that?

  86. Prof Dennis, you are sounding more and more like an inveterate academic. You’ll be getting tenure soon. For the life of me I cannot imagine a dependent claim that is not subsequent to the base claim.

    Reminds me of a lecture I once gave where I suggested giving an injection in the “contra-lateral arm” if the patient is right-handed. A particularly perceptive student asked if that was the same as the left arm. In spite of my best efforts to talk like an academic, I never did get tenure. I was lucky to get paid.

    As to Bilski, I can see this thread has already begun to disintegrate. There are no 102 or 103 issues here. Period. Prior art is irrelevant. Novelty is irrelevant. Obviousness is irrelevant.

    “First, the Court has held that whether a claimed process is novel or non-obvious is irrelevant to the § 101 analysis…So here, it is irrelevant to the § 101 analysis whether Applicants’ claimed process is novel or non-obvious.” Bilski citing Diehr.

    Maybe the USSCt would raise novelty/obviousness sua sponte, but they would have to go farther back in the record than the CAFC decision to do that — i.e., unlikely. I don’t even think they would remand for a decision on novelty/obviousness. The 102/103 issues are as mind-numbingly irrelevant as Newman’s incantation of the Statute of Monopolies.

  87. Excellent point Bayes. No book on Monte Carlo simulations would describe the hardware (computer) it used to implement the simulation. Requiring the claims to recite a general purpose computer is just adding a legal formality that adds no value, except as a way for an infringer to steal some else’s technology. If the technical literature does not need to recite the exact hardware for implementing a computer based invention, then patent law should not require reciting the hardware. See link to hallingblog.com

    I am not an expert on this area of technology, but I doubt that a Monte Carlo simulation has been used to set prices for a commodity before the filing of this patent application.

  88. I’m not going to express any opinion wrt the independent claim, since that’s being beaten to death.
    The more interesting questions relate to the dependent claims. Claim 4 provides a representative set of factors and conditions for convergence. Then, it makes clear that one of the terms is tied to a real world effect (temperature; energy prices, etc.).
    That, combined with the Monte Carlo description provides adequate description and enablement for 112 and represents the computational engine (not sure that algorithm is the right term for this kind of modeling).
    If you have ever done Monte Carlo modeling, you know that the claims relating to a Monte Carlo method with convergence would be read to involve a computer in any reasonable interpretation.
    Another interesting aspect is that algorithm representing the market model gives a response, but, the statistical input from system implements lots of “dice rolls” to see how the market would response on probabilistic events.
    When you combine all of this, you have a Monte Carlo-based system that responds to real world events (e.g., temperature; transport costs, etc.) to implement a converging statistical system through [millions] of probabilistic events.
    And, that does not include the multi-year data claims and the long tail events calculation claim, the scale of which makes human calculation unreasonable, if not impossible.
    Hard to argue that this is anything like the strawman claims in the comments above or that this would not meet the Comisky/BMC criteria.

  89. What is going on at the BPAI while Bilksi stews at SCOTUS? I see Bilski has been cited in 19 BPAI decisions since the cert grant (6/1/09). In the same 2.5 months before the cert grant, Bilski was cited 31 times. (also looks like a slightly higher 101 *reverse* rate since cert grant) Seems like cases with straight-up 101 rejections that would be easy affirms under Bilski might be sitting until this thing is resolved?

  90. It is worrying that such an undeserving case should ever have been allowed to go to the Supreme Court. The claims are in step + function form and under 35 USC 112(6) have the viability of Mr Praline’s Norwegian Blue Parrot. As rightly pointed out there are other objections. Your concluding remarks hint at a set-up, which looking at the application itself is alas all too credible. In Europe we would say that there has been a substantial procedural violation somewhere, not pursuing all available objections as should have been done.

  91. To Patent_Medicine, IMHO it’s not. But, for the time being at least, Bilski is a subject matter case.

    If you break this down from a purely academic perspective, e.g initiating a series of transactions at one fixed price (to buyers); finding “market participants” with a counter risk position (sellers); and initiating transactions with them at a second fixed price, it sounds pretty much like an abstract version what commodity brokers have been doing from time immemorial – the abstraction being that there are no specific instances of participants or prices that seems to add anything substantive to the claim.

    Assuming arguendo, that under whatever revised regime the SCOTUS arrives at, Bilksi’s subject matter passes muster under 101, it seems, without something more specific, it would still hit a brick wall at 102 and 103 based on well established and documented historical practices in the trading universe.

  92. How is this not obvious in view of heating oil companies’ offering fixed-price billing based on historical temperature averages (degree days)? They’ve been doing this (and offering this service to residential consumers in the northeast) for many years now (since at least the early 90’s). I suppose the claims must include some improved services and calculations, but really, there’s already motivation, need, etc.

  93. The fact that this claimed subject matter and alleged invention is not going to be appealing to the Justices is why this was not a good test case for the Sup. Ct. – it risks the old saw that “bad facts make for bad law.”
    Worse, the real concern of the patent bar, the impact of Bilski on computer-related inventions, especially at the Board, is not even in issue in this case, and thus may not get clearly decided, because of the express Bilski disclaimer below of any requirement of any computer.

  94. So if the Supremes reject the CAFC test this is just going back to the PTO for new grounds of rejection anyway?

    Glad Bilski has all that money to waste.

  95. “THe claims are: ‘Blah, blah, blah, blah, algorithm not attached to any apparatus.’ – not patent eligible.”

    Yes, Gaiben, the USPTO and the CAFC said that. But thanks for your helpful insights.

  96. Yes, thank you for including the claims.

    THe claims are: “Blah, blah, blah, blah, algorithm not attached to any apparatus.” – not patent eligible.

  97. Dennis,

    Thank you for turning attention to the Bilski invention itself.

    The story of Bernard Bilski and Rand Warsaw and their efforts for the past 12 years to commercialize consumer protection against fluctuating weather related energy costs is a fascinating one. Their product is called “fixed bill” pricing.

    As I’ve indicated in an earlier post, I’ve begun a Wikipedia article to document the story. link to bit.ly

    Any help on the article would be appreciated.

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