101 Decision on the Pleadings: ECommerce Patent Ineligible

by Dennis Crouch

In Tuxis Tech v. Amazon, Delaware District Court Judge Andrews has invalidated asserterted claim 1 of Tuxis Tech’s Patent No. 6,055,513 – finding that the claim lacks eligibility under 35 U.S.C. 101.  2014 WL 4382446 (D.Del September 2014) (TuxisDecisionOnPleadings). Like other decisions this week, this case was decided on the pleadings.

The patent claim is related to a computerized method for individualizing up-selling based both on the identity of the purchaser and the original product being purchased.  This generalized idea (the ‘gist’) is quite old in our market economy with sellers first obtaining a commitment for an initial purchase and then use that anchor to seek to add-on purchases based upon what the seller thinks might work for the buyer.  Amazon does this regularly and thus was an obvious target for infringement allegations.

Of course, the ‘gist’ as described above is not what was particularly claimed, rather the claim walks through a multi-step algorithm of electronic communication and data processing. Those steps are at a fairly high level of abstraction — using action verbs such as “obtaining … transaction data”, “generating an upsell offer”, “utilizing … transaction data”, etc.

Here, Tuxis agreed that the mere notion of “upselling” is an abstract idea and with that in-hand, the court moved forward with the question of whether the claims offer an inventive concept that goes beyond upselling — answering that in the negative.

None of the limitations recited by Tuxis, however, are “meaningful.” Although the claim elements have some narrowing effect on the scope of claim 1, the practical effect is insubstantial. . . .

Claim 1 requires nothing more than suggesting an additional good or service, in real time over an electronic communications device, based on certain information obtained about the customer and the initial purchase. Shrewd sales representatives have long made their living off of this basic practice.

A simple hypothetical is instructive: A man enters a clothing store to purchase a new pair of dress slacks (“a user initiated primary transaction for the purchase of a good or service”). The sales representative assists the man in finding a pair of pants, and in the process learns that the man is a banker (“a second data element relating to the [identity of the customer]”). Knowing that suspenders are fashionable in the banking profession, the sales representative offers the banker a pair of suspenders that match his pants (“utilizing at least in part the primary transaction data including the identity of the good or service of the primary transaction and the second data element [related to the customer] and determining at least one item for a prospective upsell”). The customer agrees with the sales representative and purchases the suspenders (“receiving an acceptance of the offer … in real time”). This type of marketing strategy is at the heart of claim 1 and has been practiced as long as markets have been in operation. Conduct this transaction on “an electronic communications device” instead of in a physical store and it would be an infringing sales practice if claim 1 were valid. This cannot be permitted, as it would “tend to impede innovation more than it would tend to promote it.” Mayo.

Claim invalid.

One thing is clear – the short-circuiting of the litigation process here is a powerful tool in the hands of defendants.

= = = =

Claim 1 is as follows:

1. A method for providing offers in real time of an item constituting a good or a service in the form of offers for purchase of the item to prospective customers as users of the system, utilizing an electronic communications device, comprising the steps of:

establishing a communication via the electronic communications device between the user and the system for purpose of a user initiated primary transaction for purchase of a specific good or service,

obtaining primary transaction data with respect to the primary transaction, including the identity of the prospective customer and of the good or service for purchase in the primary transaction,

generating an upsell offer as a result of the user initiated primary transaction by:
utilizing the identity of the prospective customer to obtain at least a second data element relating to the user,

utilizing at least in part the primary transaction data including the identity of the good or service of the primary transaction and the second data element and determining at least one item for a prospective upsell transaction with the prospective customer, and

offering the item to the prospective customer and receiving an acceptance of the offer from at least one user in real time during the course of the user initiated communication.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

188 thoughts on “101 Decision on the Pleadings: ECommerce Patent Ineligible

  1. Dennis — given that this judge didn’t (and legally can’t) render an entire patent ineligible, in the name of accurate legal scholarship, the “ECommerce Patent Ineligible” headline should instead read:

    “One Claim of an ECommerce Patent Ineligible” or

    “Claim One of an ECommerce Patent Ineligible” or

    “The Asserted Claim of an ECommerce Patent Ineligible”

    Though it is of course more dramatic to say an entire patent was found ineligible rather than some subset of its claims, it’s simply not true.

    This distinction is an important one.

    Shouldn’t accuracy trump the inaccurate dramatic?

    Especially on America’s leading patent law source?

    1. This distinction is an important one.

      LOL. Which of the other 266 claims do you think are likely to be valid, Steve?

      I just learned that this is a Ronald Katz innovation. Big surprise.

      1. Good point, Dennis.

        Respectfully (love your blog and all the hard work of you and your other writers — the patent / IP world wouldn’t be the same without PatentlyO), also from the case’s Conclusion: ” … to Dismiss for Failure to State a Claim is granted with respect to claim 1.”

        These seemingly “dueling” findings / rulings raises an important question of just what the scope of the decision includes.

        Has just claim 1 been ruled ineligible?

        Or have all the asserted claims … since the judge has ruled(?) that they all are “represented by” claim 1?

        I haven’t read the respective briefs, but would Tuxis have foolishly said — or agreed — with the terribly contention / proposition that claim 1 is representative of all the asserted claims?

        1. Tuxis have foolishly said — or agreed — with the terribly contention / proposition that claim 1 is representative of all the asserted claims?

          That would have indeed been foolish. But from a quick look, claim 1 is indeed representative not only of all the asserted claims but of all 267 claims. Even if the ruling only strictly applies to claim 1, this patent is dead. In my humble opinion, of course.

  2. The Internet dates to July 1969. It became, to some extent, ubiquitous when America Online was sending everybody compact discs with their software in the mid 1990s.

    1. The Internet is 55 years old. It predates the birth of most people living on Earth, but you’d never know that to hear the computer-implementers talk about it. You’d think it was invented yesterday.

      Ball point pens — “the invention that changed we write” — were invented roughly 125 years ago. Is there a legal historian out there who can remind everyone how many patents were filed on methods of using ball point pens to carry out the infinite number of business transactions that were ancient even as far back as 1888?? Or methods of using ball point pens to communicate “new” information to people?

      Thanks in advance.

      1. Your examples fail. The issue is not whether the pen/computer is eligible.

        If a claim states a method with various gerrund steps, the eligibility analysis should end there. Methods and processes are a defined statutory class. End of debate.

        In claims that involve computers, remove those limitations. Look at the method sans the computer aspect.

        1. If a claim states a method with various gerrund steps, the eligibility analysis should end there. Methods and processes are a defined statutory class. End of debate.

          The debate is indeed over and you lost the debate. Promethes v. Mayo. Look it up. It was a big Supreme Court case, predicted for years by many of us. It was 9-0 decision — a great one — and it completely contradicts what you’re saying.

          Also it’s over 2 1/2 years old and it’s stunning that you don’t seem to understand what it was about.

          1. My analysis was in direct response to your examples that misunderstand that tying a claim to a computer is irrelevant. Remove the computer elements and analyze the method that underlies the claim. Alice made this process abundantly clear. What we have now is a failure to consider the actual method itself.

            What the courts are currently practicing (as well as you), is the following:

            (1) Does the claim mention a computer or computer implementation? Ineligible unless you prove to me otherwise.

            Move to step 2. (although this step is merely sophistry as the decision has already been made due to the presence of a computer)

            (2) Does the method include any word, words, or steps that you’ve heard before? If so, invalidate the claim regardless of the actual details or processes involved.

            1. Bluto: What the courts are currently practicing (as well as you), is the following:

              (1) Does the claim mention a computer or computer implementation? Ineligible unless you prove to me otherwise.

              It only seems this way to you. These claims scream “I’m ineligible!” even without the recitation of the computer.

              Does the method include any word, words, or steps that you’ve heard before? If so, invalidate the claim regardless of the actual details or processes involved.

              I have no idea what you’re talking about because that’s not the analysis that I’m using or any of the courts are using.

              Judges are well aware of the fact that any attorney — indeed, any high school student or articulate middle school student — can take a simple concept and make it seem incredibly complicated. You seem to want judges to hold your hand and walk you through every obfuscation effort in the claim as if you were born yesterday. That’s never going to happen. In fact, that’s one of the driving reasons for using 101 to get rid of these invalid claims.

          2. Also, can you explain to me the newly discovered law of nature that is implicated by the claims or the attempt to apply that law? Since Mayo reads so perfectly on this fact pattern this should pose you no problem.

        2. Bluto: “If a claim states a method with various gerrund steps, the eligibility analysis should end there. Methods and processes are a defined statutory class. End of debate. ”

          Even if the method involves processing non statutory subject matter?

          You have got to be kidding. That was the proposition advanced on cert. in Bilski. That proposition did not prevail.

  3. The very good Retailers amicus in Alice asked for §101 to be put in front of cases as a threshold test before expensive litigation could proceed. They cited costs of litigation and especially of discovery and claim construction before even summary judgement as a painful setback for commerce in America.

    The judges in the cited cases decided on pleadings by J Bryson and two judges in Delaware are answering the Supreme Court and the Retailers with a powerful message of support for honest business.

    Delaware is second only to EDTX in patent filings, but I expect we’ll see the trolls and abusers moving out if this continues any longer. After all, judges that like abuse and corruption can just refuse decisions on pleadings and summary judgement, which no party is really ever entitled to unless the judge prefers, and keep the cases running to their courtrooms. Certain judges — perhaps even in EDTX — might just have a reputation for promoting abusive patentees and, after all, it is the plaintiff that chooses the venue.

    Which is the third most common district? Central California? I’d like to see some §101 knockouts on the pleadings there, too. Keep with with the Blue Hens, Californians.

    1. Wolfcastle below cites Eclipse IP LLC v. PayByPhone as a fine decision in Central California. Judge Wu is a Bush43 appointee. Nicely done, Judge Wu.

  4. “One thing is clear – the short-circuiting of the litigation process here is a powerful tool in the hands of defendants.”

    I agree, Dennis. It’s also clear that prevailing on these out-of-the-gate motions to dismiss is a major bummer for the defendant’s law firm. That’s the sort of win you want at the Federal Circuit after years of discovery and a jury trial.

    1. Andrew, careful now, inside counsel may be asking hard questions of outside counsel who do not even move from judgment on the pleadings.

      1. I won’t be surprised if we see a malpractice case where a defendant prevails on a 101 motion made after lots of expensive discovery. If the 101 motion is a facial attack on the patent and there are no claim construction or other factual disputes that affect the 101 analysis, it’s hard to see any valid reason for not filing the motion at a very early stage in the case.

        1. Andrew Dhuey: I won’t be surprised if we see a malpractice case where a defendant prevails on a 101 motion made after lots of expensive discovery.

          Deep stuff, Andrew! Yes, 101 is a statute and its interpretation will affect legal strategy. Like every other statute in the United States and every Supreme Court case, if lawyers go out of their way to ignore the statute in order to drive up bills, they are opening themselves up to malpractice claims.

          Of course the patent prosecutors who have been charging clients to obtain these claims which many of us have known for years were going to get thrown in the trash, they are just “zealous.”

          Right, Andrew? Riiiiiiiiiiight…..

    2. It’s also clear that prevailing on these out-of-the-gate motions to dismiss is a major bummer for the defendant’s law firm.

      Is that what they told you, Andrew?

  5. This analysis could be reigned in by Examiners and the courts using the following principles in applying Part 1 of the PTO Guidelines and Mayo approach:

    (1) When determining what the claims are “directed to”, the Examiner must use the claim language and must include the important features that render the claim patentable. The non-obvious features of the claim should be included in what the claims are “directed to.” The Examiner cannot broadly characterize the claim in a way that does not encompass the features that are non-obvious. Otherwise, the characterization of what the claims are “directed to” has no meaning in the context of the claim. Applicants cannot argue that the invention is X, where X is not in the claim language. Neither should the courts or the patent office be able to argue that the invention is directed to Y, if Y is not in the claim language.
    (2) If the abstract idea appropriately characterized in (1) above is asserted to be a fundamental economic practice by the Examiner/court, then they must also provide evidence, as the Supreme Court did, that the practice covered by the claim was “long prevalent in our system of commerce.” This is the equivalent of a prior art analysis where evidence must be cited.

    1. Isaacs, I think the PTO has a hard time with 101 ever since Alappat and State Street Bank.

      I assume you are aware that under prevailing Federal Circuit and Supreme Court case law that non statutory subject matter is given no weight in 102/103 analysis. It will be interesting to see whether the PTO follows the law, or gets lost.

      1. Under Alice, the prong “long prevalent in our system of commerce” was supported by the Supreme Court with citations to text books, showing its prior use. They did not call it “prior art” or a 1o2/103 analysis but that is exactly what they did.

      2. Ned: I assume you are aware that under prevailing Federal Circuit and Supreme Court case law that non statutory subject matter is given no weight in 102/103 analysis.

        I don’t assume anything anymore, Ned.

        I’m beginning to operate under the assumption that people who draft computer-implemented claims for a living are incapable of reading or understanding any case law.

        1. MM, agreed.

          On a different note, check out In re Huai-Hung Kao, 639 F.3d 1057 (Fed. Cir. 2011) link to scholar.google.com

          Linn, Rader and Moore giving no weight to printed matter. The issue of whether prior cases held the claim invalid because the nonstatutory subject matter was known or obvious was decided here. It makes no difference whether the nonstatutory information was know or unknown.

          Can you imagine it? Rader getting a 101 case right?

          1. Can you imagine it? Rader getting a 101 case right?

            I imagined agreeing with him on the subject matter eligibility of Myriad’s claims but he didn’t get to write those cases. 😉

            I haven’t thought about HHK in a while. Worth revisiting.

          2. Ned and MM: What do you call on page 9 of the Alice Slip Opinion to the Studies in History, Economics and Public law from 1896 for the concept of a clearing house being “long prevalent in our system of commerce.”? My point is that under the Supreme Court Analysis under section 101, for abstract ideas, they include a 102/103 like component where they cite a document to show that the concept is “long prevalent.” That is the same essential analysis as 102.

            1. Isaacs, good observation this.

              From the later discussion, this text was cited to show that intermediate settlement was, like hedging in Bilski, a fundamental economic practice.

              This did not mean, I think, that the particular method claimed was not new or non obvious. The court never went that far.

              But thanks for the cite.

    2. The non-obvious features of the claim should be included in what the claims are “directed to.”

      Only if those non-obvious "features" are eligible on their own terms.

      Otherwise your "test" doesn't achieve what it must achieve.

      Neither should the courts or the patent office be able to argue that the invention is directed to Y, if Y is not in the claim language.

      Given that the patent can be his/her own lexicogrpaher, that is an absurd requirement for an eligibility test.

      1. Reformatted:

        The non-obvious features of the claim should be included in what the claims are “directed to.”

        Only if those non-obvious “features” are eligible on their own terms.

        Otherwise your “test” doesn’t achieve what it must achieve: exclusion of claims that recite a data gathering step followed by an ineligible but non-obvious mental step.

        Neither should the courts or the patent office be able to argue that the invention is directed to Y, if Y is not in the claim language.

        Given that the patent can be his/her own lexicographer, that is an absurd requirement.

        1. MM: When I prosecute a patent application through the patent office, if I argue the “invention” is patentable because it does X, let’s say a step of transmitting a result to a device. But that limitation is not in the claim, the PTO will respond by pointing out that that feature is not the invention because it is not recited in the claim language. Therefore, the argument is given no weight. Then when you amend the claim language to include X, the argument finally works and if the claim is novel and non-obvious, it is allowed. My problem is that we should not allow the Patent Office to define the invention as being “directed to” X, when that language is not in the claim or the characterization is simply a broad abstraction of the particular limitations within the claim that rendered the case allowable. The invention is defined by the claim language. Of course the patentee can be his own lexicographer. That has no bearing on a requirement that the characterization of what the claim is “directed to” should include the actual claim language. Otherwise, there is way too much leeway with the PTO and litigators/judges on striking down claims that are novel and non-obvious. This requirement would move the pendulum back to the middle a bit.

  6. Everyone should take a moment to contemplate the fact that these judges are invalidating patents with little or no evidence. They are telling us how they think about the patents —not using evidence of how one skilled in the art would think about the patent. They are making their own 103 jumps with no evidence and anecdotal stories.

    It is outrageous to anyone that cares about the law. The 1952 has been replaced by a new law of the SCOTUS. It is call appropriately Alice.

    1. Have you seen yesterday’s Eclipse IP LLC v. PayByPhone ruling? At least the judge in that case was pretty honest in admitting that the 101 standard is now basically the “we know it when we see it” standard that was set for hard-core porn

    2. Night, I do not agree. If the claims recite generically old computer hardware, it is very easy to see that the rest is nonstatutory. If that subject matter does not produce an improved machine, then it is clearly not patentable.

      That said, when we get into biology, I don’t know for a fact whether the statutory subject matter in the claim is old or new. I don’t know whether a court can make that finding on its own accord either.

      1. Alappat. That case written before the great policy wars and before the U.S. was bought by off by big corp. The new gilded age is here. That means either you are very rich are you are wrong.

        1. Night, The major powers were pushing for the patenting of software back in the ’60s. Rich and the CCPA sought to facilitate. The Supreme Court (and at first the PTO) were and still are resistant.

          After 50 years, it appears that the dust has finally settled. Let the era be known as the 50-year war. The Don Quixote character will be played by Sir Giles Rich. His faithful acolyte and keeper of the flame by Squire Randy Rader.

          Major roles will be played by Richard H. Stern as the Sheriff of Nottingham, Justice Douglas as Black Night, Justice Stevens, Breyer and Thomas as Douglas’ acolytes.

          Also appearing late in the contest, in the role of Joan de Arc, is Malcolm Mo0ney. Mooney, as St. Joan de Arc, took up the fallen banner after the battle of State Street Bank where the forces of Stern look all but beaten. Together with his fans on Patently-O, they rallied the demoralized troops and won the war, driving Squire Rader from the battlefield entirely after the great battles of Mayo and Alice.

          The battle was epic and shall long live in patent lore.

          1. Well you forgot the second biggest player Mark Lemley and the biggest player big corp. And your black flag with “Anti” in a circle.

            But, Ned, really, the SCOTUS has not held what you say it did. There are now only 3 that hold to the medieval Stevens dissent in Bilski.

            Right now what we have is a rouge SCOTUS that is rebelling against the rightful laws of the Congress and President that is more influenced by Google than at least 200 million citizens of the U.S.A.

            Fear not for we still have science on our side and science has a way of winning in the long run.

            1. Right…. Lemley. What character best describes his role?

              An angel of the Lord who suddenly appeared bringing new tidings of hope to those who manned the barricades in a desperate last stand again the rampaging horde of trolls unleashed by Don Quixote at the battle of State Street Bank?

  7. Not surprisingly, these early “low hanging [Apple] fruit” cheap 1o1 ab initio litigation disposals have set off a massive “blame game.” This is to suggest one source of blame being conveniently overlooked:
    I wonder if any of the major [non-troll] companies that have been extensively assigning patents to patent trolls [professional PAEs if you prefer] to “monetize” realize that they have reduced the value of the rest of their patent portfolio as well by all the media, legislative, exectutive branch, and judicial backlash against patent enforcement that these patent trolls have generated in widely suing on those tens of thousands of troll-assigned patents? Especially the recent Sup. Ct. decisions on 101 [as here], on sanctions, on claim ambiguity, etc. Already this conduct bred the AIA IPR and the AIA non-joinder venue transfer assist. Furthermore it is breeding a very good chance for strong anti-troll [anti-patent -enforcement] legislation next term, especially with the expected Republican Senate majority. [Remember the vote in the Republican House passing the tough Goodlatte Bill?]

    *Congress is also waking up to the fact that often these patent “sales” to a troll shell company actually retain a significant secret financial interest in the settlement and lawsuit recoveries by the original patent owner.

    1. I’m quite sure that the savviest of these players have known for quite a while that the curtain was going to close. The idea was to strike while the iron was hot, use the system to grab the cash, wait for the courts and the public to lose patience, then divest, and watch the losers scrounge around for crumbs. The broken patent system? Whatever. Let someone else worry about it.

      1. MM, I agree. The fire sale on business method patents must have been underway for some time.

        I also think that enforcement firms have known or should have known that the handwriting was on the wall — unless they were advised by many of the posters here that think that a programmed computer is per se patentable subject matter. If I lost my shirt in response to legal advice from these folks, I’d be out for blood. Perhaps class actions might be appropriate.

    2. I don’t think that’s really what’s going on here.

      It isn’t big companies monetizing their portfolios through trolls that make up the really big abusive cases. The scan to email patents, the i4i patents, the eolas patents, the NTP patents, the podcast patents, the uniloc patents, Alice and Bilsky, and Prometheus all have in common that not one of the original filers was using the patent system mainly to protect and promote a business. They were all trolls intending to get rich off someone else’s work right from the start.

      In fact, when a big company really does try to exercise its portfolio of technical patents, they end up like Motorola v. Microsoft, gaining tiny verdicts much less than the cost of litigation. The actual technical advances in those patents are tiny and don’t claim whole industries in one gulp. They don’t foreclose swathes of common user interfaces or entirely block the use of standards since eBay. So they get tiny payouts.

      There are some big company abuses like Apple and Microsoft’s touch input and long file name patents, but they make up a tiny fraction of the companies’ portfolios and aren’t all that lucrative usually. And they don’t have to be farmed out to trolls.

      1. Owen, any company that invests in software patents as a means of obtaining revenue from others rather than protecting its own business from competition is a troll in my book.

        What company comes to mind when I say that? What company has been advocating software and business method patents, has been amassing them by the thousands every year, has been forthright about its business model of using patents as a profit center, and who does everything in its power to deflect new anti-troll legislation from focusing too much on its own activities?

        Name that company.

        1. Well, that could be lots of companies.

          Intellectual Ventures is the classic troll in that mold and an obvious villain harming innovation on purpose without even pretending to promote any kind of progress in the subject areas it sues over. (They are intent on cooking some pretty fancy and arguably innovative food, though.) And having a single moustache twisting villain is helpful to real innovators when they ask Congress for relief or ask media to cover the patent mess, so it’s better to have them than a thousand entrepreneurial patent litigators each abusing a small portfolio.

          But, to respond to post 9, IV usually isn’t obtaining its litigated patents from big companies. It does have patents from Microsoft and such, but those aren’t the lucrative ones.

          I have to admit that IBM came to mind from your second paragraph, too. Of course, IBM loses money on patents and keeps filing en masse for prestige value. They even claim to have a profit center in licensing and portfolio sales, but income and expense accounting belies that claim. Actual technological computer patents just aren’t that lucrative compared to the ones that fail §101.

          1. Intellectual Ventures is the poster child for everything that is broken with the patent system.

            If you want to see the future of the patent system under the old status quo, look no further than Intellectual Ventures and their apologists because that’s what the typical patent holder will look like in the future: a bunch of lawyers sitting around speculating on who the best targets for litigation are going to be in the future and assembling massive portfolios of invalid patents with the goal of holding those targets hostage.

            These are the same folks who want the fear of a patent lawsuit to be part of every business’s life, if not every citizen’s life. When they aren’t telling you to be afraid that they might have to sue you, they’ll recommend that you buy some litigation insurance from their “friend”.

            But they’re very rich and powerful so we must listen to them and take them very seriously when they tell us that nobody will write new software if we take away their precious patents.

    3. Cur, good observation.

      I too am against patents on non statutory subject matter that are so often used by trolls. But I am also dead set against some, if not all, of the legislation being promoted to undermine the patent system to fight trolls.

      There is an old saying about a whirlwind. Now what was it?

      1. When we return to a sane patent system and purge it of this functionally-claimed information-processing baloney, the troll problem will vanish on its own and some of those provisions will be unnecessary.

        Until it’s 100% clear that’s happened, I believe it’s prudent to move forward with any statutes or judicial fixes that make it as difficult as possible for full-time patent monetizers to harass people.

        Remember: there really isn’t much of a problem out there with chem/bio patent trolls. There’s a reason for that and it’s certainly not because there aren’t any big companies out there to sue.

  8. Those steps are at a fairly high level of abstraction — using action verbs such as “obtaining … transaction data”, “generating an upsell offer”, “utilizing … transaction data”, etc.

    Yes! Now you’re getting it.

    None of the limitations recited by Tuxis, however, are “meaningful.” Although the claim elements have some narrowing effect on the scope of claim 1, the practical effect is insubstantial.

    And the judges are getting it too. Good job all around.

    1. Agreed. Nice analysis by the judge here.

      Patentees and applicants should feel free to argue that their claims are improvements to computing technology. Of course, if that’s actually true, one would expect the claims to recite terms relevant to computer technology and not terms that you’d hear in an elementary school or a 1950s record album on how to make it big in business.

      When you see only generic terms such as the ones Dennis identified accompanied by abstractions (descriptions of data content) that’s a good sign that the claim is protecting the ineligible.

    2. >Those steps are at a fairly high level of abstraction — using action verbs >such as “obtaining … transaction data”, “generating an upsell >offer”, “utilizing … transaction data”, etc.

      And did the judge introduce any evidence into the record (the judges are clearly acting like defendants here) of how one skilled in the art would interpret these words? Or did he do a Stevens/Bryer analysis? How does that make me feel, and send it to a boy to get it programmed.

      There is so much crxp flying in this thread it isn’t even funny.

      1. And did the judge introduce any evidence into the record (the judges are clearly acting like defendants here) of how one skilled in the art would interpret these words?

        Yes, there was no material difference between the competing interpretations offered.

  9. It must be fun to be a judge – you can create hypothetical situations and “prior art” to show that an invention is an abstract idea. It’s like an official notice with a slice of fiction.

    I’m sorely disappointed that the only thing the judge in this case could come up with was a mundane example about bankers and suspenders. Where is the imagination, the creativity?

    1. I agree with Dennis that the proponents of these patents have made it difficult for folks to tell if they are being serious or not.

      I thought the judge’s example was excellent.

      Of course requiring the PTO or defendants to dig up prior art to “prove” that salesman try to sell stuff is exactly what you’d demand if you wanted to encourage endless efforts to hide the ball and flood the patent system with more of this nonsense.

      Literally nobody except for patent attorneys and their paper-pushing clients are in favor of protecting claims like this one.

  10. Dennis,

    The unfairness lies in the fact that for a 101 rejection there is no cited prior art to back up the court’s claim of the state of the art. For example, the court did not say specifically where or when the salesman example took place. They are just assuming it did. An obviousness rejection would require citing specific prior art, which is lacking here. Therefore, the new 101 rejections are an end-run around the 103 rejection.

    1. It’s not unfair. These patent claims are crazy. This is yet another example of “just do it on a computer” where the computer isn’t doing anything more than computerizing something done for a long time.

      Putting stuff in memory, telling it to do something, outputting data and sending network messages, in the generic, IS NOT the stuff of inventions. These are the “ideas:” a thought or a suggestion to a possible invention.

      There are real computer inventions out there. They do not merely provide a 30,000 foot level flowchart of how you put a manual process on a computer.

      In this case, I think you could turn this into an invention by:

      1. Actually claiming the platform on which this works
      2. Actually claiming the “upsell” functionality that they’ve invented (what makes it different than a salesman doing it?)
      3. Actually claiming how you “offer” the upsell
      4. Actualy claiming how you “receive” acceptance of the upsell.

      Notice that these claims don’t do anything one might expect. They are the vague notions of how you’d generically do it. The generalness lends itself to “gistifying” the claim.

      If you’re a defendant, one other way to attempt to counter that this tendency to characterize the process as “something old merely done on a computer” is to point out where in the claims has no meatspace equivalent AND/OR where in the claims you could do the meatspace thing on a computer in a non-infringing manner.

      1. Disregard the computerized aspect all together and show us the prior art that supposedly makes this method well known. When doing so please don’t disregard the actual words of the claims.

          1. You are such a bully. He is suggesting that the law is supposed to be applied and not glossed over.

            There is an argument that Alice overrules Graham.

        1. I first read about the procedure of upselling, including all the supposedly new material in the claim, in the 1988 Consumer Reports Auto Buying Guide. Or possibly 1987; it’s been a long time.

          Is that the kind of cite you’re looking for? Would that make the judge’s decision better for you?

            1. The claims are not directed to the naked idea of “upselling”. Every word in the claim must be accounted for and dealt with, as well as the structure, grammar, and syntax that give context to the words. Simply dismissing the claim as “upselling” ignores every cannon of claim construction that exists.

              1. Every word in the claim must be accounted for and dealt with, as well as the structure, grammar, and syntax that give context to the words.

                You’ve been told that by the federal circuit, but the supreme court constantly keeps saying that patentability doesn’t depend on the draftsman’s skill.

        2. Bluto, do you agree or disagree in principle that if the only subject matter in the claim is nonstatutory, and that subject matter is not integrated with the statutory to effect an improvement in the statutory, that the claim as a whole is unpatentable?

          If you disagree, please explain why?

          Next address the following claims in sequence and say yes or no as to whether, in your opinion, the claim is patentable:

          1. Non statutory information.

          2. Processing the NSI of claim 1 by doing X, Y, and Z mathematical steps.

          3. Claim 2, with the addition that the math is conducted using pencil and paper.

          4. Claim 2, with the addition that the math is conducted by using an abacus.

          5. Claim 2, with the addition that the math is conducted by a calculator.

          6. Claim 2, with the addition that the math is conducted using Excel.

          7. Claim 2, with he addition that the math is conducted on a programmed computer without limiting the form of the program.

          8. Claim 2, wherein the math is conducted in a system having a plurality of cameras for viewing an object simultaneously in more than one point of view, and wherein the output of the math is displayed on a 3D display thereby providing an improved 3d display of the object.

          1. AFAIK, methods and processes are still patentable (at least until you folks are done). The claim recites a method, plain and simple. Again, remove the computer aspect and analyze the claims.

            1. Ned: “Bluto, do you agree or disagree in principle that if the only subject matter in the claim is nonstatutory, and that subject matter is not integrated with the statutory to effect an improvement in the statutory, that the claim as a whole is unpatentable?”
              Please provide an analysis of your statement of what the law is. step through how the “only subject matter in the claim is non statutory” but that somehow there is other parts of a claim that are statutory which are then “integrated” with the non statutory to effect an improvement of the statutory. If a claim as one statutory element, i.e., a patent eligible limitation under section 101, then would not the claim as a whole simply be patent eligible and you move on to a 102/103 analysis?

              1. IsaacsTM, my example claim 8 is statutory. So is the claim in Diehr. Both claim nonstatutory math (information processing), but apply it to inputs to produce outputs that improve the machine or conventional process.

                Ditto the hypothetical equivalent claim in Alappat to a programmed computer operating on digital data inputs and providing digital data outputs in a larger machine known as a graphics unit for a display.

                Law:

                101: Protects new and improved, useful, machines, manufactures and compositions of matter. Subject matter that is not directed to improving a machine, manufacture or composition is nonstatutory. Known examples include economic principles, printed matter, mathematics, and methods of playing games.

                When statutory subject matter is combined with the nonstatutory in the same claim, and that nonstatutory subject matter operates to improve the statutory as in the examples given, the courts uniformly hold that the claim as a whole is patentable. When however, the statutory subject matter is not integrated with the nonstatutory, and the statutory subject matter itself is old and conventional and the only thing new in the claim is the nonstatutory subject matter, the courts have always held the claim as a whole not patentable. Examples include Funk Brothers, Benson, Flook, Prometheus, and Alice.

                Outside of the Supreme Court cases, the case of Hotel Security announced the general principle when nonstatutory subject matter was mixed with the statutory. It “held” in dicta that was later widely followed, that invention must be in the statutory. Hotel Security was widely followed, including in many CCPA cases and Federal Circuit cases. The most recent cases involve printed matter, where the printed matter and other clearly nonstatutory subject matter. Such has been given no weight in the 102/103 analysis exactly as dictated in Hotel Security.

                Take for example following case, In re Huai-Hung Kao, 639 F.3d 1057 (Fed. Cir. 2011):

                This case is not meaningfully distinct. Though the correlation between the renal impairment and bioavailability was not known, informing someone of the correlation cannot confer patentability absent a functional relationship between the informing and administering steps. In re Ngai, 367 F.3d at 1338; see also General Elec. Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242, 249, 66 S.Ct. 81, 90 L.Ed. 43 (1945) (“It is not invention to perceive that the product which others had discovered had qualities they failed to detect.”). Just as in King Pharmaceuticals, the informing step does not “transform[ ] the process of taking the drug.” 616 F.3d at 1279. This is because there is no requirement in the 1073*1073 claim that the dosage be adjusted in response to the informing step. Indeed, because there is no indication of who is to be informed or to whom the drug is to be administered, the claim would presumably cover a situation where a doctor informs patient A of the correlation and administers a therapeutically effective dose of controlled release oxymorphone to patient B. Because there is no functional relationship between the two steps in the method, and because the administration of controlled release oxymorphone is squarely present in the prior art, Ahdieh’s claim must fail. We agree with our predecessor court that to allow such a claim would effectively “remove from the public that which is in the public domain by virtue of its inclusion in, or obviousness from, the prior art.” In re Wiseman, 596 F.2d 1019, 1023 (CCPA 1979); see also In re Ngai, 367 F.3d at 1339 (noting that allowing claims where the printed matter was the only novel contribution would allow “anyone [to] continue patenting a product indefinitely provided that they add a new instruction sheet to the product”).

                Endo attempts to limit King Pharmaceuticals to the anticipation context, and distinguish it because the “informing” step was itself in the prior art, unlike the “providing information” step here. The King Pharmaceuticals analysis is not so limited. Claim 5 of United States Patent Number 6,683,102 was rejected as obvious in King Pharmaceuticals, though it depended upon a claim that was rejected for anticipation under the above reasoning. 616 F.3d at 1280-81. Moreover, it is simply not true that the correlation in King Pharmaceuticals was itself known in the prior art. See id. at 1278 (“Eon tacitly concedes that the district court never expressly found the `informing’ limitation disclosed in the prior art.”).

              2. IsaacsTM If a claim as one statutory element, i.e., a patent eligible limitation under section 101, then would not the claim as a whole simply be patent eligible and you move on to a 102/103 analysis?

                My goodness, IsaacsTM, did you just step out of your cave this morning?

                That’s not how it works. There was an excellent and very well written and reasonable case called Prometheus v. Mayo a couple years back — a case that will never ever be overturned — that very carefully destroyed the ridiculous proposition that the mere recitation of any eligible subject matter in a claim automatically rendered that claim eligible.

                Do you remember the case? The patentee, Prometheus, tried to assert a claim to a method that recited a step of gathering data (an old step) and a subsequent step of thinking about what that data meant. The patentee came right out and said in open court and said that you could infringe the claim by looking at data and thinking about it and then doing nothing!

                That was not a unique claim, by the way, and it still isn’t. There were a great many such claims out there. And I’m sure there are still a few “confused” people out there prosecuting them or paying maintenance fees on such patents or, worse, trying to play clever word games and “draft around” the issue.

                That time in our history is over and it isn’t going to come back, ever.

                1. MM: See Dennis’ comments on snarky. Let’s have a good detailed discussion here and not be rude. Let me make my point taking Ned’s example. He says claim 8 is statutory. Here is claim 8 in total, rewritten as an independent claim, including all the limitations of claim 2 as well, and ignoring the 112 issues:

                  1. Non statutory information;
                  Processing the NSI of claim 1 by doing X, Y, and Z mathematical steps.

                2. REPOSTING:

                  MM: See Dennis’ comments on snarky. Let’s have a good detailed discussion here and not be rude. Let me make my point taking Ned’s example. He says claim 8 is statutory. Here is claim 8 in total, rewritten as an independent claim, including all the limitations of claim 2 as well:

                  1. Non statutory information; and
                  processing the NSI by doing X, Y, and Z mathematical steps, wherein the math is conducted in a system having a plurality of cameras for viewing an object simultaneously in more than one point of view, and wherein the output of the math is displayed on a 3D display thereby providing an improved 3d display of the object.
                  My point is that even in Ned’s example, it includes “non statutory” subject matter and apparently also includes some statutory eligible subject matter – therefore, the above claim, according to Ned, is patent eligible. Once you have a patent eligible feature within the claim (even if you have some nonstatutory patent ineligible subject matter), the 101 analysis is complete and you move on to 102/103. This assumes that 112 is complied with and that the claim is generally “integrated.”

                3. IssacsTM,

                  I agree that one should move on to 102/103 unless

                  1) the statutory part is notoriously old, or admitted to be old; and

                  2) the nonstatutory part is not integrated into he statutory to produce an improvement in the statutory, etc.

                  And, during 102/103, the non statutory must be given no weight unless it is so integrated.

    2. The unfairness lies in the fact that for a 101 rejection there is no cited prior art to back up the court’s claim of the state of the art.

      It’s not a prior art situation. Are you honestly taking issue with the concept of upselling? You buy a car, they try and get you to take rust protection. You buy a dvd player, they try and get you to buy “high end” HDMI cables. It’s something so commonplace that you can’t credibly make an argument against it.

      Judges, just like anyone else, are allowed to draw upon common sense and common experiences. The fact that he made a particular hypothetical for something that everyone sees everyday is not wrong.

    3. While I do agree with the outcome in this case, I also do think you raise a good point. This is implicit judicial notice, and it’s done without invoking the usual legalities that go along with judicial notice. If I were grading this opinion I would have to take points off for that. I don’t think it would be the basis for a successful appeal in this case, though.

      I do see, in this string of cases Denis has been posting, a troubling trend where strawman facts (the “gist”) are set up by analogy without evidentiary support by the court, and then knocked down to invalidate the claim(s), dismissing claim limitations out of hand as “meaningless” or mere prolix.

      How does that reconcile with the deference required (i.e. “in a light most favorable to the patentee”) in these motions? Certainly, it seems to me, the patentee’s chosen language is due some respect under that burden. At least an analysis as to why the court is deciding to give it no meaning. Or is this the patent version of obscenity (“I know it when I see it”)?

      1. Strawman facts? Like “upselling” is as old as selling itself? Like “any sales method you can perform person to person can be computerized?” Those are “Strawmen”?

    4. Good comment.

      Maybe — in order to make a good 101 rejection/invalidation, a good corresponding 103 rejection should be made (but with the difference that secondary considerations don’t count).

      1. This is exactly right. This whole 101 analysis right now is mush and it reducing innovation. The new “abstract” must include a prior art search to show that something is “long prevalent in our system of commerce.” That’s what the PTO does every day, is search for prior art. If that is no longer a requirement, then the system falls apart because the analysis has no structure.

        1. yep, it turns into a subjective “I know it when I see it” or “Is that really what we need patents for” or a simple “this is junk”

          and it becomes a crutch for both examiners and judges, because reading claims, finding prior art, reading prior art and applying the art to the claims is work, sometimes hard work — just easier to say — 101 abstract idea

          1. Yes – way way too loose. I’ve gotten a bunch of these rejection. One from the PTO with NO analysis – just a bald statement that the claims are directed to an abstract idea. I’ve also spoken to an Examiner who says that they are too scared to allow any of these and they will just send them up to the board to deal with. What a mess. They can’t even think through the analysis in a logical way.

        2. IsaacsTM: This whole 101 analysis right now is mush and it reducing innovation.

          You’ve no evidence for this and you’ll never be able to find it.

          The only thing being “reduced” is the number of invalid patents that haven’t been declared invalid and the number of patents that are going to be abandoned by people who know that they are invalid.

          That’s a feature, not a bug.

          This is what people want. Most people don’t care about what patent attorneys want, particularly patent attorneys who prosecute computer-implemented patents. How do I know that? Because I talk to a lot of people about this all the time.

          1. I have no evidence except my clients who are affected by this type of ruling. So other than personal real world experience, nothing. I talk to people all the time about this as well. Not providing patent protection for true innovation will reduce investment in new industries and clearly discourages people from pouring energy into new ideas for a fear that they cannot compete with the large companies with huge resources. Why are you so scared of 102/103? Just cite the prior art if a claimed invention is not new? We have now tons of prior art in the computer-implemented space. All the building blocks are covered. I get it however, you don’t like software patents. You love this decision and the direction things are going. I however see it affecting real companies and real people and as you can see in this thread, many people including judges recognize that this is a very loose and weak structure for evaluating patent claims.

            1. IsaacsTM, I think the troll experience of period since Alappat and State Street Bank has taught us all a lesson if we ever were on the fence.

              At the time of State Street Bank, I too the view that we should await developments before we made a final decision on whether that decision was good or bad for patent law. Particularly, the most affected organizations, I thought at the time, would be banks. They allegedly were on the side of obtaining business method patents. But it turns out, they were its victims more than its beneficiaries and their reaction was strong.

              I did not expect the business method phenomenon to extend to organizations like eBay and Amazon, making them also victims. But that’s what happened.

              I am no longer on the fence. State Street Bank was a disaster.

  11. Dennis –

    If the claim recites nothing more then old upselling, then it should be rejected on 102 or 103 grounds. Not because it is abstract. Would it be abstract if upselling was new? NO!

    What if the claim was less broad. What if the second piece of information was the zip code of the buyers place of birth? What if the inventor found a relationship between color preferences and birth zip code and used that to select up-sell items? Would that be abstract?

    By not specifying the second piece of information more particularly, claim 1 might be too broad. But it is not abstract. To say it is takes us through the looking glass and puts the patent system at peril.

    1. “If the claim recites nothing more then old upselling, then it should be rejected on 102 or 103 grounds. Not because it is abstract. Would it be abstract if upselling was new? NO!”

      The Supreme Court says otherwise. When this happens in other fields of law, practitioners quickly adapt.

      1. >>>practitioners quickly adapt.

        I am not so sure that is an answer. Everyone adapts that doesn’t make it right.

      2. The Supreme Court does not say otherwise. Each of their recent 101 rulings includes the age of the “gist” to which they distill the claim down.

        In any event, each of said rulings is vague, abstract and incoherent.

          1. Not really MM. The SCOTUS has illustrated to us that they don’t care about the 1952 patent act and that they can legislate as well as the Congress. They have also illustrated that they can come up with a rule that requires no evidence to invalidate the claims of a patent.

            1. The SCOTUS has illustrated to us that they don’t care about the 1952 patent act

              I don’t see that happening at all, nor do most people I’ve spoken with about these cases.

              They have also illustrated that they can come up with a rule that requires no evidence to invalidate the claims of a patent.

              Again, other than you and few other folks who post at a couple patent blogs on the Internets, most people I hear from and speak with about these cases do not share your view in any way.

      3. Problem is, the claims, apart from the computer implementation, recite a method of upselling that they can’t find prior art to teach. Does it actually exist? We don’t know. No one is worried about looking for it.

        1. Nope. Evidence is in the eye of the judge now. The judge is all powerful.

          I have noted that examiners now have no respect for being overturned on these. I mean why should they. If the judge had found art and put together a 103 argument on his/her own, then it makes the examiner look bad. An invalidation under 101 with no evidence shames no one but the writer of the opinion and our legacy system.

          1. NWPA – Although there is certainly some amount of looseness in these recent 101 cases, nobody actually thinks that the judge is “all powerful” in this area of jurisprudence. That is really just a hyperbolic statement that is not based upon facts or a reading of the actual decisions. If you look at Judge Bryson’s decision in the recent American Airlines case, he explains how he reached the determination. He also explained that the outcome could have been different if there was a factual dispute underlying the 101 outcome or a need for claim construction. Further, as a question of law, this issue is not within the discretion of the judge but rather will be reviewed de novo on appeal.

            1. I do. You can’t show me a claim that can’t be invalidated when we ignore the language of the claim and examine the gist of the claim for newness.

            2. American Airlines?

              What about Alice?

              Didn’t Judge Thomas say something like –the rule has been that fundamental building block are not eligible — Escrow (which I distilled the establishment and manipulation of shadow accounts down to) is NOT a fundamental building block. But it is old and I don’t think it should be patented, therefore it doesn’t matter that it is not a fundamental building block. Old, therefore not a method.

              Patent Invalid.

              ?

              1. Les – The “gist” does not use the claim language. Alice said “On their face, the claims before us are drawn to the concept of intermediated statement, i.e., the use of a third party to mitigate settlement risk.” Claim was like 1 page long. So no, Alice did not use the claim language or actually evaluate the claim in terms of its recited limitations. Thus, as bad joke ahead said, its easy to invalidate a patent when you ignore the claim language. Normal patent law out the window.

      1. It certainly puts at peril … data-processing patents whose novelty is derived from the content of the data being processed.

        Indeed. This is an area where we need further clarification. None of the cases so far have really addressed this issue head-on.

      2. It certainly puts at peril business-method patents and data-processing patents whose novelty is derived from the content of the data being processed.
        Not Federal Circuit/SCOTUS = not important (except to the particular litigants)

        BTW … did anybody notice that only 3 justices signed onto an opinion that would eliminate business methods under 35 USC 101? I didn’t think so.

      3. The structure of the machine often needs to be different to deal with the data being processed so it is rare that the novelty would only come from the content of the data.

        Of course some one can look (with little or to no analysis or observational skill) at a very complicated branch, and say it is the same as another complicated branch because “it’s made of wood, and repeatedly forks into two or three at various places”.

        Granted if a claim “really” had no structure, no algorithm, and said “do it with a computer” I get how it can be invalid, but specific steps (even claimed functionally) configured to deal with certain data in certain ways in a certain order… are we to ignore that?

        1. he novelty is WHAT is being done with the data (the method), not what the data itself is.

          Okay. Then subtract all the abstract labels given to “the data” and tell everyone exactly what the computer is doing with “the data” that is “novel.”

      1. Sure, if your claim is as follows:

        1. I claim the concept of upselling.

        That would not be patent eligible. But the invention is defined by the claim language and not some broad abstraction of the claim language. This is the most damaging analysis I have seen in my 20 years of practice. It hurts small companies and innovators and protects big companies.

            1. Citing personal experience with clients and how they react to what is going on with the patent world in their space.

              I’ve spoken with hundreds of innovative small business people just in the past few months and they are all cheering for these developments.

              These “clients” should have seen this coming. And they need to understand that neither the world or the patent system revolves around them or their “innovations.”

        1. This is the most damaging analysis I have seen in my 20 years of practice. It hurts small companies and innovators and protects big companies.

          How in the world does this decision “protect big companies”?

          Big companies have plenty of invalid claims like this. Those claism are gone, too. Good riddance.

          1. Small companies are in a greater need to have protection in the marketplace than large companies because of much smaller resources. So for you yourself, would you be more likely to invest in a small startup that has IP or no IP? Seriously – where would you put your own money?? Do you deal with any investors?

    2. Would it be abstract if upselling was new? NO!

      Yes.

      What if the claim was less broad. What if the second piece of information was the zip code of the buyers place of birth? What if the inventor found a relationship between color preferences and birth zip code and used that to select up-sell items? Would that be abstract?

      No. Now you’re getting it.

      By not specifying the second piece of information more particularly, claim 1 might be too broad. But it is not abstract.

      Well obviously it changes the breadth, but that’s not the point. With no particularity about the information the claim is claiming using information about someone to try and sell them something. It’s a claim on the relationship between information and the ability to convince someone to do what you want, which is something a lawyer ought to appreciate cannot be given to one person. With particular information it’s making a statement that these particular means are of particular effectiveness. The claim becomes a claim on the idea that the best way to get someone to do what you want is by discussing their i.e. zip code. You’re viewing it as a simple scope change – in fact its entirely reorienting the invention.

      Choosing to leave out or make vague limitations appears to be something seen by lawyers as a breadth/validity tradeoff strategy. That is what 112 (and to a small extent 103) is for, and that deals with the issue a lot. But you also have to note that by making limitations vague or nonexistent you’re making a statement that X doesn’t matter to your invention. “I don’t care about the structure of the code, so long as it achieves this function.” Well the law cares about the structure of the code. The law cares about the particular method you employ. And the law will force you to care about these things too, because otherwise it’s going to invalidate your claims.

      1. I disagree with RG regarding the effect of reciting a correlation on the eligibility determination. If anything reciting “wherein dude with mustache is more likely to purchase thin suspenders” only highlights the problem with claims to “information processing methods for selling stuff to people” that recite nothing in addition besides routine computer technology.

        The patents system was not designed to promote methods of profiting. That’s what our market is supposed to do. You’ve discovered a great method for upselling? Then use it and earn your profits. Don’t choke the patent system and turn everybody’s stomach with the silly lawsuits.

        1. Suggestion. Each time you make an argument like this, take a few moments to ask yourself if the argument is applicable to all areas of technology. Your blatant subject-matter bias undercuts most of the things you write.

          If profit is the answer to people seeking ownership rights of what they create, then we don’t need a patent system.

          1. I’m not suggesting that the patent system was designed without consideration of the fact that businesses would profit from the ability to protect their products and services with patents.

            I’m suggesting that it’s absurd to allow businesses to patent, in essence, themselves, or their schemes for doing business (unless they’ve invented a new machine and described its distinct, objective structure in their claim). Handing out patents on doing business doesn’t promote progress in any Useful Art except the art of lawyering.

            Get out there and compete. If you need a patent on your method of doing business in order to do business, then you’re doing it wrong.

      2. “Well obviously it changes the breadth, but that’s not the point. With no particularity about the information the claim is claiming using information about someone to try and sell them something. It’s a claim on the relationship between information and the ability to convince someone to do what you want, which is something a lawyer ought to appreciate cannot be given to one person. With particular information it’s making a statement that these particular means are of particular effectiveness. The claim becomes a claim on the idea that the best way to get someone to do what you want is by discussing their i.e. zip code. You’re viewing it as a simple scope change – in fact its entirely reorienting the invention.”

        No. Its simply a breadth change.

        1. No. Its simply a breadth change.

          You might want to consider that the most broad application one could make would be “any application of principle X”. That clearly isn’t patentable, as that is literally taking something and then saying “apply it”. There are less broad applications which are patentable. Somewhere between the two lies a dividing line. If you view crossing that dividing line as “simply a breadth change” then I fear you’re forever lost on the judicial exceptions.

  12. Moving on to the next (and final) point raised by this case in my mind: There are parts of 35 USC that imply that Congress had it in mind that at least some types of “business methods” should be patentable. E.g. the CBM review and prior-user rights provisions.

    If Alice throws out 100% of business method patents (are they any that could conceivably be valid per Alice?), then it seems like Alice is contrary to Congress’ intent. Too bad for Congress! You can’t always get what you want, I guess.

    1. Commentariat, clearly Congress reacted State Street Bank to protect the public as best it could without intervening directly in a matter decided by the courts. This was showing some respect for the Federal Circuit, and a lot of respect for Judge Rich. But I do not believe that in passing the legislation designed to limit the damage caused by State Street Bank that Congress intended to endorse that case.

  13. Novell initiated a lawsuit yesterday vs JadeLiquid Software, using this patent: link to google.com

    Here’s claim 1:
    1. A system for providing transparent cloud access, the system comprising:
    an enterprise computing environment;
    a cloud computing environment;
    a secure bridge mechanism for interconnecting the enterprise computing environment and the cloud computing environment, the secure bridge mechanism comprising:
    a secure enterprise bridge portion associated with the enterprise computing environment; and
    a secure cloud bridge portion associated with the cloud computing environment;
    wherein the secure enterprise bridge portion is external to the cloud computing environment,
    wherein the secure enterprise bridge portion is operable to initiate a process such that there is no need to punch a hole through a firewall of the enterprise computing environment, and
    wherein the secure enterprise bridge portion and the secure cloud bridge portion interoperate to provide transparent and secure access by resources of one of the computing environments to resources within the other computing environment.

    What a mistake! Haven’t Novell’s lawyers been paying attention? Claim 1 is clearly directed to the abstract idea of providing secure access to resources in a first computing environment to resources in a second computing environment. Which is btw notoriously old. Per this recent trend, all claims will definitely be declared invalid on the pleadings.

    Interestingly, Novell got even broader claims issued at the EPO. (See EP2228969.) They should’ve sued in Europe!

    1. I don’t think that the Novell case will be as open-and-shut as you suggest. The quoted claim appears to solve a particular problem associated with computer access and security. In that sense it is arguably the type of improvement to the functioning of the computer system that the Supreme Court suggested in Alice could be eligible.

      1. Dennis, I agree with you that the claim appears to be entirely eligible because it is directed to an improvement in technology.

        However, I don’t think Commentariat was being serious. He, like a lot of posters here, was trying to poke fun at the Supreme Court analysis by declaring absolutely everything to be an abstract idea without regard to whether the so-called abstract idea is directed to an improvement to a machine, manufacture, or composition of matter.

      2. I think you’re absolutely right. But the Alice rejections from an ill-trained examining corps are starting to flow in – I suspect that sophisticated arguments regarding the “something more” of the claimed invention aren’t going to get much traction.

          1. … and always maintain an active continuation (or two).

            And if you think the backlog’s too big now … just watch as everyone deals with these improper blanket 101 rejections.

      3. That could be true IF [big if] the otherwise claimed vague term “secure cloud bridge” is specifically disclosed, and defined, in the specification as specific novel and unobvious software.

    2. Yes notoriously well-known. The Pharohs used to have a network of people that would pass messages back and forth and when a person was admitted to the royal grain stores in a first city, the messages would chat the admission to other messages to at least one second city. Often they would use an abacus to keep track of the number of grain stores the person was allowed to enter.

      I think Steve Martin had a song about this.

        1. Is there a difference? No one knows what anything means or what the limits of anything are. How can you argue or discuss something when everything depends on what the definition of is is.

          1. The Supreme Court decisions on section 101 do not serve the legal system. They do not lead to predictability of outcomes. They do not offer certainty with respect to particular cases. They do not promote efficiency. They do, however, potentially disrupt massive amounts of previously existing legal rights. Something that is only supposed to happen rarely and for weighty reasons.

            1. H, with all due respect, I strongly disagree with you. It was State Street Bank that has done palpable damage to the economy, to the patent system, to the reputation of Judge Rich, and to any patent attorney who defends it.

    3. Claim 1 is directed to proxying chosen information through an organization that blocks information that isn’t chosen. The computer networks and firewalls in question are old in the art. No novel implementation details exist in the claim other than the abstract idea of a specially privileged courier approving some communication in a context of a general blackout.

      The concept is well known. One among hundreds of examples would be wartime censorship of soldiers’ letters home.

      Also, there is no novel technological content here. Novell is claiming a well known concept about information in the context of established technology.

      This should be an easy §101 invalidity decision on the pleadings.

      But it probably won’t be. The main mode of reasoning of the judges seems to be to ask whether the concept seems complicated to them and to declare anything trivially simple to be abstract. This is not as obviously trivial because it’s buried under several layers of tech talk. So it could survive, unless the judge is smart and isn’t impressed by tech talk.

      The case was filed in Utah, so — if it proceeds at all — it will probably be wiped out on SJ over §103. Utah judges are strongly pro-commerce and pro-innovation so obvious abuses will often be stopped when the abuse becomes obvious to the judge.

      But it probably won’t proceed to judgement because Novell and JadeLiquid are business partners and Novell is probably just firing warning shots.

      1. Just looked at the filing date. It’s 2009. I was expecting 1996 or something. I now predict §102 on SJ, not §103, if the case proceeds.

        What is wrong with the examiners in the PTO?

  14. The simple hypothetical shows me that the claim should be rejected as obvious under 103 and that 101 is being (mis)used as a means of shortening the litigation because it feels unfair to make a party defend an obvious patents at length instead of on the pleadings.

      1. As to Dennis’s question as to whether or not the “abstraction” is old I’d say it has to be.

        Consider fiber optics. Wouldn’t a claim to a fiber optic cable be nothing more than an abstraction if not for the abstraction being new?

        The different indexes are only adding something to whatever was before because the abstraction is new. If the abstraction is old, then it is adding nothing.

        (NOTE: I THINK THIS ENTIRE ANALYSIS IS PYCHOTIC. THAT THE 1952 PATENT STATUTE IS BEING COMPLETELY NEGATED BY THE NEW 101 LEGISLATION. )

        1. So, Dennis it is prong 2 that matters. If the abstraction is new, then every element is adding something. If the abstraction is old, then what they are saying is that every element that merely implements the abstraction does add something.

          This is really ridiculous reasoning you know. This type of thinking is exactly what the 1952 patent act was supposed to short circuit. I think Alice overrules Graham.

          1. It is a both a debatable and moot point as to what the Supreme Court intended.

            Debatable: broad/narrow – not outright against software OR business methods

            Moot: lower courts (and patent office) running with the “Gist/Abstract” sword – with no limits offered by the Court.

          2. Ned, the SCOTUS did what it did. Examining intent does not come into play until there is something ambiguous. Here there is not.

            1. Well Night, I do agree that Supreme Court appears confused at times because what it says in its opinions on 101 is almost incomprehensible, vague, indefinite, completely unnecessary, and almost asinine at times. But I do not believe they intended to place any novelty requirement on nonstatutory subject matter.

              In contrast, there certainly is a novelty requirement for statutory subject matter.

              Just for illustration purposes, the math at issue in Diehr was an Arrhenius algorithm that was well-known in the art. Nevertheless, the Supreme Court approved the eligibility of those claims.

    1. I agree. 103 should have been applied.

      The courts are getting this all wrong. It’s not a matter of this becoming a slippery slope. It is already a sliding slope downwards.

      There are NO clear guidelines regarding what is an “abstract idea”.

      And there are NO clear guidelines of “What more?” is needed in the claim.

      All this, based on a judicially created exception. Really?

      A narrow exception for natural laws makes sense (e.g., can’t invent what was merely discovered), but needs to be narrowly focused.

      The “Abstract idea” exception has no basis in patent law (e.g., constitution, legislation, economic theories, etc.). We have 102/103 and 112 to clobber abstract claims.

      Now we’re seeing granted patents invalidated on the pleadings with this new nebulous standard.

      Alice Corp (and the recent Fed Cir cases) are terribly misguided decisions and will eventually harm the US economy. Plain and simple.

      1. New objective structure, recited in the claim, is a very clear example of “what more.”

        If you don’t like that example, that’s your problem. But stop pretending that isn’t clear because it’s as clear as it gets.

      2. Agreed – 100%. This needs to be remedied as it will harm innovation. I’ve already seen it with clients having patents that are affected. Very damaging.

    2. Sunny – I don’t really understand your point here. If the patent is invalid under both 101 and 103, why is it unfair to the patentee that the court first addresses the 101 issue? That seems perfectly natural – especially as here where (at least in the court’s view) this was a very easy case.

      1. I don’t really understand your point here. If the patent is invalid under both 101 and 103, why is it unfair to the patentee that the court first addresses the 101 issue?

        Why operate with a scalpel when then same tumor can be destroyed with a sledge hammer? Oh wait … it is because a sledge hammer is a very indiscriminate tool that will destroy both good tissue and bad.

        35 USC 101 was never intended to be used in the manner it is being used today. See Professor Hricik’s commentaries on the issue.

          1. Please identify the good tissue being destroyed. I haven’t seen that happen yet.
            You haven’t seen it because you don’t believe it is possible to be there.

            One person looks out of a window and sees God everywhere. A different person looking out the same window sees nature created by evolution and natural processes.

            Your statement reflects more upon your philosophy (i.e., the only good patent is an invalidated patent) than reality.

      2. Dennis,

        The problem I was raising is not that the Court first addresses the 101 issue (although I think there are other problems in invalidating a claim on the pleadings rather than on summary judgment, mostly to the extent that you believe claim construction involves underlying questions of fact). The exact problem is that obviousness considerations are leaking into and distorting the 101 analysis. And the Courts are now doing this without realizing they are doing this.

        1. Right – The troubling issues here really are (1) the current state of high ambiguity and subjectivity in 101 analysis; and (2) a seeming ease at which the courts are relying upon their own conjecture regarding the invention rather than upon tested evidence.

          Of course, in this case the patentee admitted that “upselling” is an abstract idea.

      3. I think it’s important to talk about 103 in the context of the million bucks it takes to get there. It’s a problem by itself, but rather less so if software patents are constructively finished….

    3. Yes, the 101 abstraction defense has become a backhanded way of much more inexpensively [for both clients and courts] dealing with a real world problem of 103-obvious patents being sued on that should never been issued. Namely, that in patent litigation patent validity under 102, 103 or 112 rarely ever even gets decided! [See the statistics in the recent Patently-O blog reported study.] More than 97% settle before trial with no validity issue decision, mostly to avoid massive unrestricted discovery and other litigation costs. Of the remaining few that get an S.J. decision [after finally getting a Markman claim interpretation], or go to to trial, most are decided on non-infringement issues, and getting an invalidity decision may require a Fed. Cir. appeal as well.
      Early 103 S.J. decisions instead of these 101 decisions would make much more legal sense but are very difficult to get for several reasons.
      Once we finally start to see less obvious patents for something other than naked business methods with no real software [just “arm waving”] having their 101 attacks judicially REJECTED, some of the hysterical hyperbole over the impact of Alice should subside.

      1. The obvious problem, however, is hindsight. In this defacto 103 analysis where things are “old”, the patents are sometimes a decade or more old and we’re judging them by today’s standard of “old”. Ten years ago, internet access was far from ubiquitous.

        1. Yes, but “ubiquitous” has never been a requirement for 103 obviousness – a single publication anywhere will normally suffice.

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