Court: Parties Must Justify Need for Claim Construction

Patent,

IP Cleaning v. Annovi Research (W.D. Wisc. 2008)

IPC has accused Annovi of infringing its patent covering a high-pressure washer. Although only a single claim is in dispute, both parties requested that the court construe several claim terms. In a recent order, however, the court denied both motions for claim construction because neither party had “persuade[d] the court that construction of each specified term is necessary to resolve a disputed issue concerning infringement or invalidity” beyond the generic statement of resolving issues of infringement and validity. According to the court, it will only resolve claim construction disputes where the parties have a “concrete dispute” that will impact the outcome.

“The reason for the order is not to require parties to parrot its language before the court construes claim terms; it is to avoid the devoting judicial resources to the issuance of advisory opinions on the construction of claim terms about which the parties have no concrete dispute. As much as the parties may hate to show their hands at this early stage, they must do so, if they hope to seek the benefit of claim construction before filing motions for summary judgment. Because the parties have disregarded the order and failed to demonstrate the basis for requesting construction of the terms they dispute, their motions requesting claim construction will be denied.”

This decision is in tension with O2 Micro v. Beyond Innovation (Fed. Cir. 2008). In that case, the Federal Circuit found that the lower court had improperly refused to construe certain disputed terms. “When the parties raise an actual dispute regarding the proper scope of these claims, the court, not the jury, must resolve that dispute. . . . When the parties present a fundamental dispute regarding the scope of a claim term, it is the court’s duty to resolve it.” O2 Micro. The two cases may be distinguished on the ground that in IP Cleaning, the parties have not yet shown an “actual dispute regarding the proper scope” of the claims.

Federal Circuit Affirms Narrow Construction of “Internet Billing Method”

Patent, ,

Netcraft Corp v. eBay and PayPal (Fed. Cir. 2008)

Netcraft sued eBay and PayPal for infringement of its patents that cover an “internet billing method.” During claim construction, the Western District of Wisconsin found that the limitation of “providing a communications link through equipment of the third party” requires that an infringer “provid[e] customers with internet access.” Of course, eBay and PayPal do not provide internet access.

On appeal, the Federal Circuit affirmed the claim construction and summary judgment of non-infringement.

Three reasons why the claim was narrowly construed:

  1. In many cases, claim construction issues are won or lost in the process of defining which “term” is going to be construed. The patentee argued that the term “communications link” was broadly written and amenable to broad construction. The defendants argued that the element in question was actually the entire process of “providing a communications link through the equipment of the third party.” That entire process is more amenable to a narrow interpretation.”
  2. The patentee did not help its cause by adding the “communications link” to the claims during prosecution. The term is not used anywhere in the specification – consequently, the patentee had little ammunition for arguing for a broad interpretation.
  3. The specification declares several “objects of the present invention,” including providing internet access. Also, the abstract includes a statement regarding an “agreement between an Internet access provider and a customer.” And, there is no specific language indicating that these statements are directed at “alternative embodiments.” [Note here, a distinction between alternative embodiments and optional functions.]

Affirmed.

Federal Circuit Affirms Narrow Construction of “Internet Billing Method”

Patent, ,

Netcraft Corp v. eBay and PayPal (Fed. Cir. 2008)

Netcraft sued eBay and PayPal for infringement of its patents that cover an “internet billing method.” During claim construction, the Western District of Wisconsin found that the limitation of “providing a communications link through equipment of the third party” requires that an infringer “provid[e] customers with internet access.” Of course, eBay and PayPal do not provide internet access.

On appeal, the Federal Circuit affirmed the claim construction and summary judgment of non-infringement.

Three reasons why the claim was narrowly construed:

  1. In many cases, claim construction issues are won or lost in the process of defining which “term” is going to be construed. The patentee argued that the term “communications link” was broadly written and amenable to broad construction. The defendants argued that the element in question was actually the entire process of “providing a communications link through the equipment of the third party.” That entire process is more amenable to a narrow interpretation.”
  2. The patentee did not help its cause by adding the “communications link” to the claims during prosecution. The term is not used anywhere in the specification – consequently, the patentee had little ammunition for arguing for a broad interpretation.
  3. The specification declares several “objects of the present invention,” including providing internet access. Also, the abstract includes a statement regarding an “agreement between an Internet access provider and a customer.” And, there is no specific language indicating that these statements are directed at “alternative embodiments.” [Note here, a distinction between alternative embodiments and optional functions.]

Affirmed.

Patently-O Bits and Bytes

Patent, ,
  • Model Jury Instructions: More on this in an upcoming post. At Judge Michel’s request an all star cast of patent law experts have hammered out a set of model jury instructions for patent infringement actions. [Link][Comments welcome to PatentJuryInstructions@gmail.com]
  • BPAI Appeal rules have been stayed – Most likely until after January 20.
  • Two keen jobs:
    • Fellow at Berkeley Law School (Sponsored by Microsoft). Apply by February 1, 2009 [Link]
    • Appellate Litigator for the USPTO Solicitor’s Office. Apply by January 9, 2009 [Link]
  • Does stare decisis apply to a previous court’s unappealed claim construction decision? See Shire v. Sandoz
  • Donoghue: “Breach of Patent Settlement Does Not Create Federal Jurisdiction” [Link]
  • Barkoff: “Federal Circuit Affirms $16.8 Million Award of Fees to Takeda in Pioglitazone Case” [Link]
  • In house counsel Brian Schar writes the American Intellectual Property Abstract (American IPA)
  • Mullin provides an update on the Troll Tracker defamation suit.
  • The Trading Secrets blog has some useful information on protecting rights via employee agreements. [Link]

Patently-O Bits and Bytes

Patent, ,
  • Model Jury Instructions: More on this in an upcoming post. At Judge Michel’s request an all star cast of patent law experts have hammered out a set of model jury instructions for patent infringement actions. [Link][Comments welcome to PatentJuryInstructions@gmail.com]
  • BPAI Appeal rules have been stayed – Most likely until after January 20.
  • Two keen jobs:
    • Fellow at Berkeley Law School (Sponsored by Microsoft). Apply by February 1, 2009 [Link]
    • Appellate Litigator for the USPTO Solicitor’s Office. Apply by January 9, 2009 [Link]
  • Does stare decisis apply to a previous court’s unappealed claim construction decision? See Shire v. Sandoz
  • Donoghue: “Breach of Patent Settlement Does Not Create Federal Jurisdiction” [Link]
  • Barkoff: “Federal Circuit Affirms $16.8 Million Award of Fees to Takeda in Pioglitazone Case” [Link]
  • In house counsel Brian Schar writes the American Intellectual Property Abstract (American IPA)
  • Mullin provides an update on the Troll Tracker defamation suit.
  • The Trading Secrets blog has some useful information on protecting rights via employee agreements. [Link]

New Patent Appeals Rules: Delayed by Whitehouse OMB

Patent

Patent applicants appealing examiner decisions do not need to comply with the USPTO’s new appeal brief rules that were set to become effective on December 10, 2008. According to the notice to be published tomorrow: The PTO “will notify the public when the revised effective and applicability dates are set. In the subsequent notification, the Office will provide at least a 30-day time period before the BPAI final rule 2008 becomes effective.”

http://www.federalregister.gov/OFRUpload/OFRData/2008-29297_PI.pdf

As noted previously on Patently-O. David Boundy of CantorFitz has led the charge against implementation of these new rules. Boundy notes the fact that Jon Dudas signed the FR notice on December 5, but as of this writing (Dec 9 at 5:23pm), there is still no notice on the USPTO website.

Post-Reexamination Litigation Estoppel

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Acco Brands, Inc. v. PC Guardian Anti-Theft Products, Inc., 3-04-cv-03526 (N.D.Cal., December 4, 2008).  

Infringers have long been reticent about filing for inter partes reexamination. One problem is the estoppel provision – 35 U.S.C. § 315(c) – that limits the claims that the third-party requester can later make in court. In particular, Section 315(c) is written to estop the third party requester from later asserting an invalidity defense in litigation if the third-party requester “raised or could have raised” the ground during the reexamination. (The estoppel provision only applies once the PTO determines that the challenged claim is valid).

35 U.S.C. §315(c): A third-party [inter partes] requester … is estopped from asserting at a later time, in any civil action … the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings.

In this case, the PC Guardian had requested an inter partes reexamination based on several prior art references. However, upon consideration, the PTO confirmed that the claims were patentable.

In the ensuing infringement litigation, PC Guardian made an end-run around the estoppel argument. For its non-infringement contention, PC Guardian presented three 1980’s Macintosh portable computers as prior art. According to the defendant’s argument, the physical computers when seen in combination with the references considered by the PTO rendered ACCO’s patent obvious.

Because reexaminations are restricted to considering only patents and printed publications, the district court agreed that Section 315 does not estop PC Guardian from asserting the combinations during litigation.

File Attachment: PCGuardian.pdf (84 KB)

During prosecution, claims are indefinite when amenable to multiple plausible constructions

Indefinite, Patent, ,

Ex parte Miyazaki (BPAI Precedential 2008)

In a rare precedential opinion, the Board of Patent Appeals and Interferences (BPAI) has re-defined the standard for a §112 indefiniteness rejection during patent prosecution. The BPAI’s definition for pre-issuance indefiniteness focuses on ‘plausible’ indefiniteness and varies dramatically from the Federal Circuit’s standard of ‘insolubly ambiguous.’ The BPAI argues that a lower threshold of ambiguity is justified pre-issuance because it gives the PTO power to ensure that claims are “precise, clear, correct, and unambiguous.”

As such, we employ a lower threshold of ambiguity when reviewing a pending claim for indefiniteness than those used by post-issuance reviewing courts. In particular, rather than requiring that the claims are insolubly ambiguous, we hold that if a claim is amenable to two or more plausible claim constructions, the USPTO is justified in requiring the applicant to more precisely define the metes and bounds of the claimed invention by holding the claim unpatentable under 35 U.S.C. § 112, second paragraph, as indefinite.

The expanded indefiniteness examination runs parallel to the PTO’s approach of broadly construing claims during prosecution. Both tactics are intended to better ensure that issued patents can be counted-on as being valid patents.

The Federal Circuit’s insolubly ambiguous standard is premised on the strong presumption of validity associated with an issued patent. The BPAI grounds its lower threshold in the notion that patent applications have no presumption of validity.

Read the BPAI Miyazaki Opinion: /media/docs/2008/12/fd073300.pdf

Patently-O Bits and Bytes

Patent,
  • Law School Hiring: This year has been dismal for law student hiring. There are many 2Ls and 3Ls who are hopeful patent attorneys, but do not have jobs lined up yet or even serious prospects. In past years, those students would have been already snapped up by the big players. Contact me (dcrouch@patentlyo.com) if you are interested in looking at some Mizzou law resumes.
  • Crocs: Helping keep the streets free of ugly shoes (as well as microscopic fungi), Sketchers has agreed to stop selling its molded footwear. Crocs had sued for design patent and trade dress infringement. Crocs, Inc. v. Skechers U.S.A., Inc., Case No: 1:08-cv-01450-RPM (D. Co 2008).
  • Wall Street Journal Patent News:
    • Medicis Pharmaceuticals (NYSE) climbed 2.26, or 20%, to 13.38, as the Scottsdale, Ariz., skin-products maker agreed to settle a yearlong patent dispute with Impax Laboratories over a generic version of Medicis’ acne drug Solodyn.
    • Falling 7.67, or 46%, to 8.95, Tessera Technologies, a San Jose, Calif., company specializing in semiconductor packaging, was handed a setback when an International Trade Commission judge said six big chip makers didn’t infringe its patents.
  • Future of the PTO: On December 11, 2008 in DC, Chris Katopis will moderate an historic panel of former PTO Leaders: Dickinson, Lehman, Mossinghoff, and Godici. Free Live or via Telephone. Details, RSVP, and call-in info from TLiszka@comptia.org.
  • Santa Clara Computer and High Technology Law Journal’s 25th Annual Symposium: January 30, 2009 in San Jose. I will be presenting some ideas on attorney ethics and inequitable conduct. Other topics include developments in non-practicing entity patent litigation and litigation before the ITC.

Patently-O Bits and Bytes

Patent,
  • Law School Hiring: This year has been dismal for law student hiring. There are many 2Ls and 3Ls who are hopeful patent attorneys, but do not have jobs lined up yet or even serious prospects. In past years, those students would have been already snapped up by the big players. Contact me (dcrouch@patentlyo.com) if you are interested in looking at some Mizzou law resumes.
  • Crocs: Helping keep the streets free of ugly shoes (as well as microscopic fungi), Sketchers has agreed to stop selling its molded footwear. Crocs had sued for design patent and trade dress infringement. Crocs, Inc. v. Skechers U.S.A., Inc., Case No: 1:08-cv-01450-RPM (D. Co 2008).
  • Wall Street Journal Patent News:
    • Medicis Pharmaceuticals (NYSE) climbed 2.26, or 20%, to 13.38, as the Scottsdale, Ariz., skin-products maker agreed to settle a yearlong patent dispute with Impax Laboratories over a generic version of Medicis’ acne drug Solodyn.
    • Falling 7.67, or 46%, to 8.95, Tessera Technologies, a San Jose, Calif., company specializing in semiconductor packaging, was handed a setback when an International Trade Commission judge said six big chip makers didn’t infringe its patents.
  • Future of the PTO: On December 11, 2008 in DC, Chris Katopis will moderate an historic panel of former PTO Leaders: Dickinson, Lehman, Mossinghoff, and Godici. Free Live or via Telephone. Details, RSVP, and call-in info from TLiszka@comptia.org.
  • Santa Clara Computer and High Technology Law Journal’s 25th Annual Symposium: January 30, 2009 in San Jose. I will be presenting some ideas on attorney ethics and inequitable conduct. Other topics include developments in non-practicing entity patent litigation and litigation before the ITC.

California’s One-Sided Patent Regime: Litigating With Immunity

Patent

Biomedical Patent Management Corp. (BPMC) v. California Department of Health Services (on petition for certiorari)

BPMC’s patent infringement lawsuit against the California was dismissed after the state asserted immunity under the Eleventh Amendment of the US Constitution – a decision affirmed by the Federal Circuit. In its petition for certiorari, BPMC argues that the State has waived its immunity. BPMC presents two separate theories of waiver – one narrow and one broad. The narrow waiver theory focuses on the facts of this particular dispute – that California had previously voluntarily been a litigant in a case involving the same parties, same patent, and same infringing actions. The prior case was dismissed and then re-filed, but the state refused to participate in the second coming. The broader and more interesting waiver theory focuses on California’s deep and continued involvement in the patent system as a patent applicant, patent holder, patent plaintiff, and patent licensor. Particularly notable for this case is California’s extensive use of the Federal Courts to sue infringers. As posed by BPMC, the broad waiver question is: “Whether or in which circumstances a State may waive its Eleventh Amendment immunity in patent actions by regularly and voluntarily invoking federal jurisdiction to enforce its own patent rights.”

Before granting certiorari in patent cases, the Court often asks the Solicitor General to provide the US Government’s views on the petition. In a recent filing, the Solicitor General recommended that the petition for certiorari be denied. On the narrow waiver question, the Solicitor sees the facts as too narrow to warrant Supreme Court attention. The SG sees the broader question as “undeniably important.” However, the Solicitor sees the proposed focus on whether a state has “regularly and voluntarily invoked federal jurisdiction to enforce its own patent rights” as “unworkable.”

“Under petitioner’s proposed rule, it is not clear at what point a State would be deemed to have voluntarily participated in enough federal court patent suits to have waived its Eleventh Amendment immunity from all such suits. Nor is it evident how a State would know in advance when it was poised to cross the waiver threshold.”

The Solicitor also notes that most of the issues were resolved by Florida Prepaid cases. Although well written, the Solicitor’s brief is just that – brief.

There are several reasons why I do not believe that the SG’s opinion seriously diminishes the chances of being granted certiorari. First, [some]* patent cases in the past decade were granted certiorari despite a SG recommendation against the grant. Second, the Supreme Court has already shown interest in the case by asking for the SG’s recommendation, and the SG recognizes that the issue is important. Third, the SG’s arguments of unworkability and lack of clarity are rather weak. The brief is just that – brief – and does not address many underlying constitutional issues. Fourth, the Supreme Court has already focused on this issue and has experience. However – as the SG notes, the issue raised by BPMC is not directly covered by the court’s prior rulings.

BPMC’s counsel – Andrew Dhuey – indicated that the Supreme Court may consider the petition in its January 9th Conference.

Notes:

  

Patent Practitioner Ethics Update

Patent, ,

In a recent presentation, PTO Discipline Director Harry Moatz repeated his statements regarding a practitioner’s duty to make reasonably inquiry prior to submitting any papers to the USPTO. “Practitioners submitting papers must read each paper submitted to the Office before it is submitted. Each submitted paper must be read in its entirety … regardless of the source of the paper.” The duty of inquiry is codified in the Federal Regulations as 37 C.F.R. § 11.18(b). That section requires that submitted papers be submitted only for proper purposes and that any claims made be legally warranted. Section (b)(1) requires that all statement made be believed to be true and that no statement “covers up by any trick, scheme or device a material fact.” Section (b)(2) goes on to require that the person filing the paper actually make “an inquiry reasonable under the circumstances” to ensure that the paper is not being presented for any improper purpose and that the contentions are “warranted by existing law or by a nonfrivolous argument [to change] existing law.”

Mr. Moatz provides several examples that could be seen as failure to make a reasonable inquiry: (1) Filing an application with claims that are anticipated by at least one publication authored by one of the inventors. (2) Burying a reference material to patentability among a large number of cumulative references. (3) Filing an application with one or more claims unpatentable over a combination of prior art references cited by applicant in the specification.

37 CFR § 11.18 (b) By presenting to the Office or hearing officer in a disciplinary proceeding (whether by signing, filing, submitting, or later advocating) any paper, the party presenting such paper, whether a practitioner or non-practitioner, is certifying that—

(1) All statements made therein of the party’s own knowledge are true, all statements made therein on information and belief are believed to be true, and all statements made therein are made with the knowledge that whoever, in any matter within the jurisdiction of the Office, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or knowingly and willfully makes any false, fictitious, or fraudulent statements or representations, or knowingly and willfully makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement or entry, shall be subject to the penalties set forth under 18 U.S.C. 1001 and any other applicable criminal statute, and violations of the provisions of this section may jeopardize the probative value of the paper; and

(2) To the best of the party’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances,

(i) The paper is not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of any proceeding before the Office;

(ii) The other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(iii) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(iv) The denials of factual contentions are warranted on the evidence, or if specifically so identified, are reasonably based on a lack of information or belief.

In his presentation, Mr. Moatz listed the primary complaints that he receives against patent practitioners. They include:

  • Neglect.
  • Lack of candor (Either to client or the PTO).
  • Failure to make reasonably inquiry.
  • Failure or delay in filing application
  • Failure to respond to OA (even when client has not paid)
  • Misuse of the certificate of mailing
  • Insufficient funds
  • Failure to pay issue fee
  • Failure to revive
  • Failure to turn over files to new attorney
  • Failure to communicate with client

Additional reasons for ethical sanction include DUIs; unauthorized taking of prescription meds; and disbarment.  Under the new ethics rules (Aug 2008), a practitioner must notify the OED Director within 30 days of being convicted of “any” crime. The PTO will then determine whether the conviction is serious enough to merit interim suspension. Practitioner must also give notice of disbarment within 30 days.  The new rules also provide for “disability inactive status” when a practitioner is judged legally incompetent.

Notes:

Patently-O Bits and Bytes: Vote for Patently-O

Patent

The ABA is running its annual law blog popularity contest, and Patently-O again made the cut of top 100 legal blogs. Apparently, Patently-O is being voted on for the award of best “niche” blog. Unfortunately, I tend to avoid that word (niche) because I don’t want to sound too French (neesh) or too rural (nitch).

Follow the link to Vote for Patently-O (towards the bottom of the ballet) http://www.abajournal.com/blawgs/blawg100_2008/niche. (Only one vote per computer).

Patently-O Bits and Bytes: Vote for Patently-O

Patent

The ABA is running its annual law blog popularity contest, and Patently-O again made the cut of top 100 legal blogs. Apparently, Patently-O is being voted on for the award of best “niche” blog. Unfortunately, I tend to avoid that word (niche) because I don’t want to sound too French (neesh) or too rural (nitch).

Follow the link to Vote for Patently-O (towards the bottom of the ballet) http://www.abajournal.com/blawgs/blawg100_2008/niche. (Only one vote per computer).

Standard Setting and Waiver of Patent Rights

Patent

Qualcomm Inc. v. Broadcom Corp (Fed. Cir., Dec. 1, 2008)

“This patent infringement case involves the consequence of silence in the face of a duty to disclose patents in a standards-setting organization (“SSO”).”

Qualcomm participated in the “Joint Video Team” to set standards for video compression technology. During those meetings, Qualcomm did not disclose that it held two patents that covered technologies required to comply with the standards being developed.

Under participant agreements, however, disclosure was required to help ensure “a simple royalty free baseline profile.” And, under Rambus, even non-explicit disclosure requirements can create a duty to disclose patent rights during standard setting discussions.

Because the patentee intentionally failed to disclose its patents, the court agreed that the patents were unenforceable under the equitable doctrine of implied waiver. However, the court limited the scope of the waiver only to products that were compliant with the new (H.264) standard.

Notes:

  • The court cites Mark Lemley’s 2002 SSO paper

Constitutional Separation of Powers

Patent, ,

The structure of the US Constitutional is designed to separate governmental powers. In patent law, separation of powers issues continue to arise – largely because the executive branch (PTO) and the judicial branch (Federal Courts)* decide many of the same patent law issues. Post-grant procedures such as reexamination and reissue complicate the scene because those avenues allow for parallel decisionmaking by the two bodies. Notably, most inter partes reexaminations involve parallel patent infringement litigation. Usually, a district court will reach its result before the PTO, and questions then arise as to the PTO’s subsequent power to affirm or deny patentability.

Although it appears to be more of a statutory construction issue, BlackBoard recently sued the USPTO (Dudas) in a case involving these issues. Originally, BlackBoard sued Desire2Learn for patent infringement and Desire2Learn subsequently requested inter partes reexamination of the asserted patent. In February 2008, a Texas jury found the asserted claims valid** and infringed. (**i.e., not invalid). The District Court did not issue its final judgment until May 2008. That case is pending appeal at the Federal Circuit. In the meantime, in March 2008, the PTO issued an initial rejection of the claims and has, more recently, refused to end the reexamination.

Under 35 U.S.C. §317(b), an inter partes reexamination must be stopped by the PTO if the requestor’s invalidity argument is rejected in a civil action and a “final decision has been entered.”

FINAL DECISION – Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit … [then] an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings. 35 U.S.C. §317(b)

BlackBoard argues that the final decision by the Federal Court in Texas strips the PTO of authority to maintain the inter partes reexamination. The PTO, on the other hand, maintains that the litigation is not really final until Desire2Learn exhausts all appeals.

Notes:

  • In addition to the PTO and Courts, the International Trade Commission (ITC) is a third decisionmaking body that is considered a quasi-judicial governmental agency. There are some cases where the same patent and same parties have been simultaneously involved in disputes in all three forums.
  • BlackBoard complaint
  • Desire2Learn Patent Infringement Blog
  • As a work-around, Desire2Learn has its servers located Canada. The only valid BlackBoard claims are “method” claims, and, under RIM v. NTP, a method claim is only infringed if each step of the method is performed in the USA.

BPAI: “Programmed Computer Method” Not Patentable Subject Matter

Patent,

Ex parte Halligan (BPAI 2008)

Halligan’s patent application claims a “programmed computer method” that operates to identify trade secret information. (Claim 119). In essence, the computer program has the common law rules of trade secrets hardcoded, and those rules are applied to determine whether particular information is a “trade secret.” Applying the machine-or-transformation test of Bilski, the Board of Patent Appeals and Interferences (BPAI) rejected Halligan’s claims as lacking patentable subject matter under 35 USC § 101.

Under Bilski, “[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” To avoid preemption the Federal Circuit emphasized that “the use of a specific machine or transformation of an article must impose meaningful limits on the claim’s scope to impart patent-eligibility;” that “the involvement of the machine or transformation in the claimed process must not merely be insignificant extra-solution activity;” and that the transformation “must be central to the purpose of the claimed process.”

Transformation: As in Bilski, the transformation here involves legal rights and “does not represent physical and tangible objects.” Therefore, it fails the transformation prong of the test.

Machine: Claim 119’s only tie to a machine is the preamble statement that the method is a “programmed computer method.” The BPAI listed several reasons why that recitation is insufficient to satisfy the machine prong of Bilski:

“This recitation fails to impose any meaningful limits on the claim’s scope as it adds nothing more than a general purpose computer that has been programmed in an unspecified manner to implement the functional steps recited in the claims. Were the recitation of a “programmed computer” in combination with purely functional recitations of method steps, where the functions are implemented using an unspecified algorithm, sufficient to transform otherwise unpatentable method steps into a patent eligible process, this would exalt form over substance and would allow pre-emption of the fundamental principle present in the non-machine implemented method by the addition of the mere recitation of a “programmed computer.” Such a field-of-use limitation is insufficient to render an otherwise ineligible process claim patent eligible.”

Means-Plus-Function language: A second set of claims were directed to the “programmed computer.” Functional elements of the software were described as “means for ___.” The structure of a means plus function element is presumably particular enough to constitute a “particular machine.” However, the BPAI expressly did not reach that issue – rather, the Board rejected those claims under 35 USC § 112 as indefinite for lacking any description of particular structure in the specification. Following Aristocrat, the opinion noted that software-type means should include a disclosure of an algorithm. “The Appellant has failed to disclose any algorithm, and thus has failed to adequately describe sufficient structure, for performing the recited functions of claims 1 and 121 so as to render the claims definite.”

Notes:

   

Patently-O Bits and Bytes

Patent, ,
  • Poor Economic Forecast and Patent Prosecution:
    • Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;
    • Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;
    • Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.
    • Good: When times are tough, folks save their scraps. Patents are one way to do that;
    • Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.
  • I spent a summer at Heller Ehrman while in law school. The firm dissolved earlier this fall. Using Patent Buddy, I graphed the number of registered patent practitioners at Heller over the past several years. Their patent department shows problems stretching back to 2007.

  • Figure 2 below shows the same information for the law firm of Akin Gump. Patent Buddy’s data comes directly from the PTO’s enrollment database. That database is usually a bit outdated because many patent attorneys are slow to update their records.

   

  

Patently-O Bits and Bytes

Patent, ,
  • Poor Economic Forecast and Patent Prosecution:
    • Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;
    • Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;
    • Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.
    • Good: When times are tough, folks save their scraps. Patents are one way to do that;
    • Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.
  • I spent a summer at Heller Ehrman while in law school. The firm dissolved earlier this fall. Using Patent Buddy, I graphed the number of registered patent practitioners at Heller over the past several years. Their patent department shows problems stretching back to 2007.

  • Figure 2 below shows the same information for the law firm of Akin Gump. Patent Buddy’s data comes directly from the PTO’s enrollment database. That database is usually a bit outdated because many patent attorneys are slow to update their records.