The defensive patent aggregator RPX published a white paper The Prevalence of Software Patent Assertion. It analyzes what type of software claims were asserted (e.g., computer implemented inventions v. covered business method) and by whom (e.g., non-practicing entities (NPEs) v. operating companies) before the Supreme Court decided patent eligibility of software related inventions in Alice v. CLS Bank.
Although the paper appears to aim at which software patents pose the greater threat to businesses, it should have another utility to patent prosecutors. On pages 5-9, RPX presents reasons why a set of representative software claims constitute "a computer implemented invention" or "a covered business method." Initial assignments to art units can play a big role on what happens next. For example, the art units examining business methods are rejecting them under 35 USC 101 at much higher rates. The Supreme Court voted 6-3 business methods are not categorically excluded, but the reality is different art units have different interpretations of 35 USC 101. One can attempt to draft the claim so as to not fall within business methods, but sometimes the subject matter doesn't give much latitude. Thus, during prosecution what type of claim may be more important than the details of the claim.
Copyright © 2015 Robert Moll. All rights reserved.
Showing posts with label business method patents. Show all posts
Showing posts with label business method patents. Show all posts
Monday, January 5, 2015
Saturday, January 3, 2015
Richard H. Stern - Alice v. CLS Bank: US Business Method and Software Patents Marching to Oblivion?
Tonight, I recommend reading Richard H. Stern's article Alice v. CLS Bank: US Business Method and Software Patents Marching to Oblivion? Mr. Stern is a smart guy and has been writing on software patent eligibility for many years.
Copyright © 2015 Robert Moll. All rights reserved.
Copyright © 2015 Robert Moll. All rights reserved.
Wednesday, July 24, 2013
Congress Introduces Yet Another Anti-troll Bill - Expanding Post Grant Review for Business Method Patents
In Supermarkets' solution to patent trolls: fight it out at the USPTO, Joe Mullin reports that Congressman Darrell Issa (R-CA) and Judy Chu (D-CA) introduced a bill to the House on July 22 that proposes to expand the types of business method patents eligible for post grant review (PGR). The Issa-Chu bill sounds similar to an earlier proposed bill by Senator Schumer (D-NY).
Noting the benefits of the bill, CCIA patent counsel Matt Levy notes that the cost of post grant review is currently about $100,000, which is a bargain compared to the $2 million or more that might be spent to defend against a US patent in federal court. Mr. Levy suggests it could be even more of a bargain as "if a troll is targeting 20 or 30 companies they can each chip in." Of course the downside to this "even better bargain" is 20 or 30 companies would be subject to an estoppel if the PGR request to invalidate or narrow the essential patent claims is unsuccessful.
Copyright © 2013 Robert Moll. All rights reserved.
Noting the benefits of the bill, CCIA patent counsel Matt Levy notes that the cost of post grant review is currently about $100,000, which is a bargain compared to the $2 million or more that might be spent to defend against a US patent in federal court. Mr. Levy suggests it could be even more of a bargain as "if a troll is targeting 20 or 30 companies they can each chip in." Of course the downside to this "even better bargain" is 20 or 30 companies would be subject to an estoppel if the PGR request to invalidate or narrow the essential patent claims is unsuccessful.
Copyright © 2013 Robert Moll. All rights reserved.
Thursday, May 9, 2013
Schumer Bill to Expand Post-Grant Review Beyond Business Methods Patents Used in Financial Products and Services
On May 2, U.S. Senator Charles Schumer introduced a small but important senate bill (S. 866) that would expand post-grant review (PGR) to a patent claiming a method or apparatus for performing data processing or other operations used in the practice, administration, or management of an enterprise, product, or service. Currently, the transitional business method patent review is limited to business methods used in financial products and services. This bill would allow a PGR challenge to all business method patents under 35 USC 101, 102, 103, and/or 112. Senator Schumer's press release gives details. This bill would make business method patent review a permanent law.
Copyright © 2013 Robert Moll. All rights reserved.
Copyright © 2013 Robert Moll. All rights reserved.
Thursday, January 17, 2013
Solutions to the Software Patent Problem - Conference Materials
On November 16, 2012, Santa Clara University staged a conference Solutions to the Software Patent Problem. After attending I posted: Richard Stallman and Professor Duffy Clash - Solutions to the Software Patent Problem - Santa Clara University - November 16, 2012.
Today, SCU emailed the conference materials:
View the videos
Where applicable, we’ve posted the speakers’ slides as separately downloadable files. Videos synced with presentation slides and just videos (for those that do not use Microsoft products)
Speaker essays. Also check out the related series of essays published in Wired.com Opinion
Media coverage of the event
Results of the audience polls about which solutions they liked best
Other conference resources
The conference page provides a one-stop inventory of all of these resources.
View High Tech Law Institute blog: http://law.scu.edu/blog/hightech/
Copyright © 2013 Robert Moll. All rights reserved.
Today, SCU emailed the conference materials:
View the videos
Where applicable, we’ve posted the speakers’ slides as separately downloadable files. Videos synced with presentation slides and just videos (for those that do not use Microsoft products)
Speaker essays. Also check out the related series of essays published in Wired.com Opinion
Media coverage of the event
Results of the audience polls about which solutions they liked best
Other conference resources
The conference page provides a one-stop inventory of all of these resources.
View High Tech Law Institute blog: http://law.scu.edu/blog/hightech/
Copyright © 2013 Robert Moll. All rights reserved.
Sunday, November 18, 2012
Vringo v. Google - Laches Dashing Expectations - From $493M to $31M?
The recent Vringo v. Google patent infringement case illustrates an issue that may arise for prospective licensors and licensees. In a nutshell, Vringo purchased U.S. Patent No. 6,314,420 and U.S. Patent No. 6,775,664 from Lycos, filed a lawsuit in September 2011 claiming Google's system of advertising infringed the patents, and stated it expect to recover $493 million. At the end of trial, the jury held the patents infringed and not invalid, but only awarded $31 million against Google et al. based on a 3.5% royalty rate on a 20% increase attributable to the invention.
Why didn't Vringo receive $493 million? You might think it wasn't realistic and mere saber rattling to encourage Google to settle before trial. But as I looked further, I learned Vringo assumed it would get damages for infringement from 2005 to 2011, since U.S. patent law permits damages up to six year prior to the filing of the lawsuit (i.e., September 2011).
During this trial, there was a fair amount of trading going on. On the last day of a two-week trial, Mr. Dan Ravicher disclosed he was shorting Vringo (VRNG) in Vringo vs. Google: Outcome Probabilities. In his opinion, Vringo had not established Google was aware of the patents and had failed to elicit sufficient jury sympathy to support damages of $493 million. He estimated the net present value to Vringo was $95 million.
Vringo's facts would not generate much jury sympathy. Vringo had not invented anything and had bought the patents from a search engine company that Google had passed long ago. Its press releases saying Google's revenue would go to zero and Vringo would make billions sounded of hubris. Vringo trial slides were cartoon-like. Vringo told the jury Google's SmartAdServingSystem ("Google's SmartASS") infringed the patents. For some of the slides see Mr. Mullin's article: Google infringes old Lycos patents, must pay $30 million.
Much more than lack of jury sympathy, laches reduced Vringo's damages. Under the equitable doctrine of laches defense: (1) if a patent owner unreasonably and inexcusably delays filing an infringement suit, and (2) the alleged infringer has been materially prejudiced by the delay, a patent owner cannot recover damages that occurred before the complaint was filed. The statute says Vringo could get damages up to six years prior to filing the complaint, but a judge can rule in equity to supplement statutory law to achieve a fair result.
The Vringo lawsuit had laches written all over it from the beginning. The '420 patent issued 11 years ago, November 6, 2001, and the '664 patent issued over eight years ago, August 10, 2004. Even six years of delay raises a rebuttal presumption of laches. It's true a patent owner may "burst" the presumption by producing evidence sufficient to raise an issue the delay was reasonable or excusable under the circumstances, but Vringo was unable to do it. Thus, laches precluded recovery before the complaint was filed in September 2011. A six year period of infringement was reduced to one year. I guess the judge wasn't sympathetic.
Whenever a patent is enforced near the end of its term, you must consider laches. For more about laches, I suggest the Federal Circuit's case A.C. Aukerman Co. v. R.L Chaides Construction and cases citing Aukerman.
Copyright © 2012 Robert Moll. All rights reserved.
Why didn't Vringo receive $493 million? You might think it wasn't realistic and mere saber rattling to encourage Google to settle before trial. But as I looked further, I learned Vringo assumed it would get damages for infringement from 2005 to 2011, since U.S. patent law permits damages up to six year prior to the filing of the lawsuit (i.e., September 2011).
During this trial, there was a fair amount of trading going on. On the last day of a two-week trial, Mr. Dan Ravicher disclosed he was shorting Vringo (VRNG) in Vringo vs. Google: Outcome Probabilities. In his opinion, Vringo had not established Google was aware of the patents and had failed to elicit sufficient jury sympathy to support damages of $493 million. He estimated the net present value to Vringo was $95 million.
Vringo's facts would not generate much jury sympathy. Vringo had not invented anything and had bought the patents from a search engine company that Google had passed long ago. Its press releases saying Google's revenue would go to zero and Vringo would make billions sounded of hubris. Vringo trial slides were cartoon-like. Vringo told the jury Google's SmartAdServingSystem ("Google's SmartASS") infringed the patents. For some of the slides see Mr. Mullin's article: Google infringes old Lycos patents, must pay $30 million.
Much more than lack of jury sympathy, laches reduced Vringo's damages. Under the equitable doctrine of laches defense: (1) if a patent owner unreasonably and inexcusably delays filing an infringement suit, and (2) the alleged infringer has been materially prejudiced by the delay, a patent owner cannot recover damages that occurred before the complaint was filed. The statute says Vringo could get damages up to six years prior to filing the complaint, but a judge can rule in equity to supplement statutory law to achieve a fair result.
The Vringo lawsuit had laches written all over it from the beginning. The '420 patent issued 11 years ago, November 6, 2001, and the '664 patent issued over eight years ago, August 10, 2004. Even six years of delay raises a rebuttal presumption of laches. It's true a patent owner may "burst" the presumption by producing evidence sufficient to raise an issue the delay was reasonable or excusable under the circumstances, but Vringo was unable to do it. Thus, laches precluded recovery before the complaint was filed in September 2011. A six year period of infringement was reduced to one year. I guess the judge wasn't sympathetic.
Whenever a patent is enforced near the end of its term, you must consider laches. For more about laches, I suggest the Federal Circuit's case A.C. Aukerman Co. v. R.L Chaides Construction and cases citing Aukerman.
Copyright © 2012 Robert Moll. All rights reserved.
Saturday, June 23, 2012
A Guide to the Legislative History of the America Invents Act (AIA)
If you are interested in the legislative history of the America Invents Act (AIA), I recommend reading Joe Matal's A Guide to the Legislative History of the America Invents Act: Part I of II and Part II of II. Here are links to download Part I and Part II of the Guide. This article should be helpful to applicants for US patents and parties seeking to challenge issued US patents in the PTO.
As a brief summary, Part I describes the legislative history and origins of the first-to-file system and the modifications to 35 USC 102 (novelty and statutory bars), 35 USC 103 (obviousness), 35 USC 115 (inventor's declaration), 35 USC 122 (confidential status and publication of applications), and 35 USC 135 (derivation).
Part II describes the legislative history and origins of the new laws that apply to US patents. Thus, it describes the post-grant procedures, inter partes proceedings, supplemental examination, business method patent review, the new defense of prior commercial use, partial repeal of the best mode, virtual and false marking, advice of counsel, court jurisdiction, PTO funding, and rules for patent term extensions.
Although the article should prove useful, legislative history can be misleading. Indeed, the Supreme Court has warned against relying on legislative statements not anchored in the text of the statute. First, the statements may not pertain to a law that passed. It is also difficult to identify who drafted the law. Given we don't know who drafts the laws, how do we assign weight to the statements of various members of Congress? Also the legislative history of the AIA is lengthy as it stretches from 2005 to 2011. Nonetheless, organizing the legislative history of the AIA is a major undertaking so the article is a welcome start.
Copyright © 2012 Robert Moll. All rights reserved.
As a brief summary, Part I describes the legislative history and origins of the first-to-file system and the modifications to 35 USC 102 (novelty and statutory bars), 35 USC 103 (obviousness), 35 USC 115 (inventor's declaration), 35 USC 122 (confidential status and publication of applications), and 35 USC 135 (derivation).
Part II describes the legislative history and origins of the new laws that apply to US patents. Thus, it describes the post-grant procedures, inter partes proceedings, supplemental examination, business method patent review, the new defense of prior commercial use, partial repeal of the best mode, virtual and false marking, advice of counsel, court jurisdiction, PTO funding, and rules for patent term extensions.
Although the article should prove useful, legislative history can be misleading. Indeed, the Supreme Court has warned against relying on legislative statements not anchored in the text of the statute. First, the statements may not pertain to a law that passed. It is also difficult to identify who drafted the law. Given we don't know who drafts the laws, how do we assign weight to the statements of various members of Congress? Also the legislative history of the AIA is lengthy as it stretches from 2005 to 2011. Nonetheless, organizing the legislative history of the AIA is a major undertaking so the article is a welcome start.
Copyright © 2012 Robert Moll. All rights reserved.
Monday, May 21, 2012
WIldTangent v. Ultramercial - Supreme Court Rejects Federal Circuit Decision on 35 USC 101
The Supreme Court is pushing Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___ (2012)(Mayo) as the standard to use in assessing whether software/Internet related subject matter is eligible for patent protection.
In WildTangent v. Ultramercial, the Supreme Court recently wrote: The petition for a writ of certiorari is granted [G]. The judgment is vacated [V], and the case is remanded [R] to the United States Court of Appeals for the Federal Circuit for further consideration in light of Mayo.
The question presented? Whether, or in what circumstances, a patent's general and indeterminate references to 'over the Internet' or at 'an Internet website' are sufficient to transform an unpatentable abstract idea into a patentable process for purposes of 35 USC 101? Supreme Court Rule 14 requires the questions presented for review should not be argumentative, but apparently it didn't matter.
In Mayo, the Supreme Court rejected a medical diagnostic patent as encompassing an unpatentable law of nature once you remove the conventional steps. Justice Breyer's analysis dissects the claim: (1) to determine what is conventional in the claim; (2) to subtract the conventional part from the claim; and (3) to determine if the remaining part of the claim sets forth a law of nature (i.e., scientific principle). If the answer is yes to (3), the claim is ineligible for a patent according to Justice Breyer, since judicial law says you can't patent a law of nature. However, this conflates the patent eligibility of 35 USC 101 with the rejected point of novelty test.
The Federal Circuit had held US Patent No. 7,346,545 (the '545 patent) patentable subject matter. It relates to a particular method of giving a copyrighted product to a consumer for watching an advertisement over the Internet.
Claim 1 is representative for this analysis:
1. A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:
first step of receiving, from a content provider, media products that are covered by intellectual-property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;
a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;
a third step of providing the media product for sale at an Internet website;
a fourth step of restricting general public access to said media product;
a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;
a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;
a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;
an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;
a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;
a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and
an eleventh step of receiving payment from the sponsor of the sponsor message displayed.
Frankly, Judge Rader understands 35 USC 101 and correctly held claim 1 patentable, since it requires a computer executing a software program with considerable complexity. This is not an abstract idea. It may have not been so great, however, to say the '545 patent discloses a practical application of an idea, because it sounds like State Street rather than In re Bilski. Anyway, now that the Federal Circuit has to deal with the GVR, it will be reconsidering whether or not claim 1 is patentable subject matter under 35 USC 101. At least the Federal Circuit refused the temptation to talk about the gist of the '545 patent being an idea that advertising can be used as a form of currency. Too often the press, the courts, and the patent community give a pithy summary of the claim that sticks to everyone's mind and never get back to the actual claim language, which impacts the legal analysis.
35 USC 101 does not support the Supreme Court's willingness to jump into the long standing software patent debate (Congress had an opportunity to legislate software patents out of existence in the recently passed America Invents Act, but remained silent), and require the Federal Circuit instead apply this new Mayo test that dissects a patent claim, discards whatever a court thinks is conventional then determines subject matter eligibility with whatever remains in the claim. Instead, Mayo's point of novelty patent eligibility test merely helps the Supreme Court implement its desire to rein in patents.
Copyright © 2012 Robert Moll. All rights reserved.
In WildTangent v. Ultramercial, the Supreme Court recently wrote: The petition for a writ of certiorari is granted [G]. The judgment is vacated [V], and the case is remanded [R] to the United States Court of Appeals for the Federal Circuit for further consideration in light of Mayo.
The question presented? Whether, or in what circumstances, a patent's general and indeterminate references to 'over the Internet' or at 'an Internet website' are sufficient to transform an unpatentable abstract idea into a patentable process for purposes of 35 USC 101? Supreme Court Rule 14 requires the questions presented for review should not be argumentative, but apparently it didn't matter.
In Mayo, the Supreme Court rejected a medical diagnostic patent as encompassing an unpatentable law of nature once you remove the conventional steps. Justice Breyer's analysis dissects the claim: (1) to determine what is conventional in the claim; (2) to subtract the conventional part from the claim; and (3) to determine if the remaining part of the claim sets forth a law of nature (i.e., scientific principle). If the answer is yes to (3), the claim is ineligible for a patent according to Justice Breyer, since judicial law says you can't patent a law of nature. However, this conflates the patent eligibility of 35 USC 101 with the rejected point of novelty test.
The Federal Circuit had held US Patent No. 7,346,545 (the '545 patent) patentable subject matter. It relates to a particular method of giving a copyrighted product to a consumer for watching an advertisement over the Internet.
Claim 1 is representative for this analysis:
1. A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:
first step of receiving, from a content provider, media products that are covered by intellectual-property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;
a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;
a third step of providing the media product for sale at an Internet website;
a fourth step of restricting general public access to said media product;
a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;
a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;
a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;
an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;
a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;
a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and
an eleventh step of receiving payment from the sponsor of the sponsor message displayed.
Frankly, Judge Rader understands 35 USC 101 and correctly held claim 1 patentable, since it requires a computer executing a software program with considerable complexity. This is not an abstract idea. It may have not been so great, however, to say the '545 patent discloses a practical application of an idea, because it sounds like State Street rather than In re Bilski. Anyway, now that the Federal Circuit has to deal with the GVR, it will be reconsidering whether or not claim 1 is patentable subject matter under 35 USC 101. At least the Federal Circuit refused the temptation to talk about the gist of the '545 patent being an idea that advertising can be used as a form of currency. Too often the press, the courts, and the patent community give a pithy summary of the claim that sticks to everyone's mind and never get back to the actual claim language, which impacts the legal analysis.
35 USC 101 does not support the Supreme Court's willingness to jump into the long standing software patent debate (Congress had an opportunity to legislate software patents out of existence in the recently passed America Invents Act, but remained silent), and require the Federal Circuit instead apply this new Mayo test that dissects a patent claim, discards whatever a court thinks is conventional then determines subject matter eligibility with whatever remains in the claim. Instead, Mayo's point of novelty patent eligibility test merely helps the Supreme Court implement its desire to rein in patents.
Copyright © 2012 Robert Moll. All rights reserved.
Wednesday, May 16, 2012
Post-Grant Proceedings Under the America Invents Act - The 12 Month Rule
On May 15, 2012, Teresa Stanek Rea of the USPTO posted: Building a Better Post Grant on Director Kappo's Blog. She talks about how the USPTO plans to build a better post-grant proceedings under the America Invents Act (AIA) that will serve as an efficient alternative to patent litigation.
Ms. Stanek Rea states "Inter partes reexamination has not proven as efficient as was originally intended. It has taken an average of 32 to 38 months to move from filing to issuance of a final reexamination certificate. The time to a final determination within the USPTO is even longer, when you factor in appeals." Ms. Stanek Rea notes the AIA establishes post-grant review, inter partes review and the transitional program for covered business method patents by the Board of Patent Appeals and Interferences (Board) which will be referred to as the Patent Trial and Appeal Board.
Congress has limited the length of these post-grant proceedings to 12 months, plus six months for exceptional cases. To explain how the PTO will complete a post-grant proceedings in 12 months Ms. Stanek Rea states:
1. The PTO is adding many judges with considerable patent prosecution and litigation experience to the 120 judges currently on the Board.
2. The PTO's rule making will incorporate input from the user community, the PTO, the federal court, the ITC, and interferences.
3. The AIA's post-grant procedures rules will be streamlined to what is essential to decide the case. Thus, dilatory practices, wasteful motions, and procedural traps that drove older interferences to last 4-7 years will not be permitted.
4. Judges will be given great latitude to shepherd cases to stay on schedule.
Although Ms. Stanek Rea envisions reaping the benefits of a straightforward process (e.g., a trial), implemented by experienced judges, resulting in a fair and efficient proceeding, the post doesn't address how the PTO will keep stay on such a tight schedule plus reduce the backlog of more than 30,000 ex parte appeals now pending.
Ms. Stanek Rea states "Inter partes reexamination has not proven as efficient as was originally intended. It has taken an average of 32 to 38 months to move from filing to issuance of a final reexamination certificate. The time to a final determination within the USPTO is even longer, when you factor in appeals." Ms. Stanek Rea notes the AIA establishes post-grant review, inter partes review and the transitional program for covered business method patents by the Board of Patent Appeals and Interferences (Board) which will be referred to as the Patent Trial and Appeal Board.
Congress has limited the length of these post-grant proceedings to 12 months, plus six months for exceptional cases. To explain how the PTO will complete a post-grant proceedings in 12 months Ms. Stanek Rea states:
1. The PTO is adding many judges with considerable patent prosecution and litigation experience to the 120 judges currently on the Board.
2. The PTO's rule making will incorporate input from the user community, the PTO, the federal court, the ITC, and interferences.
3. The AIA's post-grant procedures rules will be streamlined to what is essential to decide the case. Thus, dilatory practices, wasteful motions, and procedural traps that drove older interferences to last 4-7 years will not be permitted.
4. Judges will be given great latitude to shepherd cases to stay on schedule.
Although Ms. Stanek Rea envisions reaping the benefits of a straightforward process (e.g., a trial), implemented by experienced judges, resulting in a fair and efficient proceeding, the post doesn't address how the PTO will keep stay on such a tight schedule plus reduce the backlog of more than 30,000 ex parte appeals now pending.
Copyright © 2012 Robert Moll. All rights reserved.
Saturday, April 21, 2012
Public Comments on the USPTO's Proposed Rules to Implement the America Invents Act
The USPTO published 374 public comments on the proposed rules to implement the America Invents
Act (AIA):
The USPTO also published 24 comments in response to the PPAC hearings on the proposed patent fees.
- Inter Partes Review
- Post-Grant Review
- Transitional Program for Covered Business Method Patent Review
- Definition of Technological Invention
- Derivation Proceedings
- Umbrella Administrative Trial Rules and Practice Guide
- Genetic Diagnostic Testing
- Statute of Limitations Provisions for Office Disciplinary Proceedings
- Patent Public Advisory Committee Public Hearings on the Proposed Patent Fee Schedule
- Satellite Offices for the Nationwide Workforce
- Supplemental Examination and Revision of Reexamination Fees
- Inventor's Oath or Declaration
- Preissuance Submissions by Third Parties
- Post Patent Provisions
- Leahy-Smith America Invents Act Implementation
The USPTO also published 24 comments in response to the PPAC hearings on the proposed patent fees.
Saturday, April 14, 2012
Chief Judge Smith - Addressing Key Aspects of the America Invents Act
The Leahy-Smith America Invents Act Implementation web page contains news and information regarding the USPTO's implementation of the America Invents Act (AIA). As part of that effort, Chief Judge Smith of the Board of Patent Appeals and Interferences recently gave a message explaining the proposed rules for inter partes review (IPR), post grant review (PGR), covered business method review, and derivation under the AIA.
Chief Judge Smith says the public is regularly raising certain issues such as: (a) standards necessary to trigger inter partes (IPR) and post grant reviews (PGR), (b) the real party in interest requirement for an IPR/PGR petitioner, (c) timing for completion of a new trial, (d) the pro hac vice admission of non-registered practitioners, and (e) the definition of the term technological invention.
The following links give Chief Judge Smith's input on these key aspects of the AIA:
Chief Judge Smith says the public is regularly raising certain issues such as: (a) standards necessary to trigger inter partes (IPR) and post grant reviews (PGR), (b) the real party in interest requirement for an IPR/PGR petitioner, (c) timing for completion of a new trial, (d) the pro hac vice admission of non-registered practitioners, and (e) the definition of the term technological invention.
The following links give Chief Judge Smith's input on these key aspects of the AIA:
- Standards to Trigger an Inter Partes Review and Post Grant Review
- Real Party in Interest
- Timing to Complete an Inter Partes Review, Post Grant Review, and Covered Business Method Review
- Pro Hac Vice Admission to Practice before the Board for New Administrative Patent Trial
- Technological Invention Definition
Copyright © 2012 Robert Moll. All rights reserved.
Friday, March 30, 2012
Professor Lemley - Fixing the Patent Office
I read Professor Lemley's paper Fixing the Patent Office and want to highlight several things tonight.
Professor Lemley states the PTO has issued many dubious software, electronic commerce, and Internet patents over the last two decades. He doesn't quantify this observation, but I think the patent community would mostly agree. Professor Lemley states a natural reaction is the PTO needs to award patents only when deserved. However, he pragmatically notes most bad patents merely protect technologies that fail in the marketplace, protect against non-existent competitors, are not infringed, licensed, or the subject of negotiation or assertion in court. In short, their issuance has no social cost.
As Professor Lemley states it, "The problem, then, is not that the Patent Office issues large number of bad patents. Rather, it is that the Patent Office issues a small but worrisome number of economically significant bad patents and those patents enjoy a strong, but undeserved, presumption of validity."
Having framed the problem this way, Professor Lemley states his solution: "The Patent Office should focus its examination resources on important patents and pay little attention to the rest."
Before turning to discuss that proposed solution, Professor Lemley asserts what probably won't fix the PTO:
Preventing fee diversion. For the last two decades Congress has diverted 10-20% of the PTO fees to general revenue. Yet in the last several years fee diversion did stop, while the backlog of pending applications grew. My comment is last year the backlog was slightly reduced.
Giving the PTO the authority to set own fees. The PTO may be in the best one to decide fees, but it is unclear which fees should be increased or decreased. For example, examining all applications more intensely is wasteful. Being stricter on allowances reduces the patent maintenance fees that make up for low filing fees. Raising filing fees raises costs on startups at the outset. Increasing a maintenance fee even by a factor of ten ($40,000) won't discourage patent trolls given the potential rewards of patent litigation.
Rejecting bad patents. The vast majority of bad patents are not litigated or licensed so rejecting them is wasteful. Applicants dissatisfied with a rejection can file requests for continued examination (note 53% of pending applications are RCEs) and/or continuations.
Retaining patent examiners. The PTO has a high rate of turn-over, and the median examiner has only been at the PTO for three years. The problem is junior examiners appear to be better at rejecting bad patents than senior examiners.
Outsourcing search. The thinking is examiners are not particularly good at finding relevant prior art so let's outsource this time-consuming task. However, research show examiners rely almost entirely on their own prior art search not the prior art submitted by others.
Next, Professor Lemley asserts what might work:
Second pair of eyes (SPER). Professor Lemley reminds after State Street the PTO initiated SPER to help deal with the flood of business method patents. He notes, however, SPER is asymmetric - two examiners must agree to allow a case while it takes only one examiner to reject a case. This led to 16% allowance rates in contrast to 72% on average. Professor Lemley finds it interesting that the PTO recently shut down SPER program on business methods applications. My comment is SPER over all technology areas would be very expensive, if not wasteful.
Changing examiner incentives. Research indicates much of the problem may be examiner's behavior due to incentives. This section seemed a bit muddled about how and what incentives should change. My experience over the past two decades is the quantity of cases processed sometimes appears to be more important to the PTO than the quality of examination. Whatever the change to incentives, you can count on the examiner's union to resist changes to how the examiners are evaluated and patent attorneys to resist any changes that make it more difficult to get patents.
Tiered review. Professor Lemley now presents his solution that the PTO should focus on important patents and pay little attention to the others, but it is difficult to know which patents are likely to be important. Professor Lemley concedes the government would find it difficult to know, but patent applicants and competitors have better information about the likely value of an invention. Thus, he proposes applicants "gold plate" their patents by paying for an intense search and examination process that would merit a strong presumption of validity. My comment here is (1) startup may be excluded from gold-plating; and (2) the tiered review appears to conflict with the Supreme Court's i4i v. Microsoft decision that the clear and convincing standard for invalidity applies to all US patents.
Oppositions and adversarial evaluations. I agree with Professor Lemley's expectation that the new post-grant and inter partes review will help fix the Patent Office's tendency to issue bad patents at times, but note this addresses bad patents rather than fixes the Patent Office, which to me is about the original examination. Also it will be interesting if the public input reduces the PTO fees for post-grant procedures.
Professor Lemley concludes that (1) reform proposals can never eliminate bad patents because examination is an imperfect process; (2) we will continue to rely on litigation as the primary means for weeding out bad patents; (3) courts should modulate the presumption of validity to match the facts; and (4) clear and convincing must be earned by patent owners.
Despite enjoying Professor Lemley's paper in the end I could only find agreement with Professor Lemley on conclusion (1). With regard to conclusion (2), if reexamination is not the primary means for weeding out bad patents I think it is becoming the best way to attack dubious patents. AIPLA economic survey data shows it's much less expensive than patent litigation even if you factor in the proposed increase in PTO fees. PTO statistics indicate it is effective in eliminating invalid patents as we saw in Oracle v. Google. Further, timely reexamination may result in stays of expensive litigation. With regard to (3) and (4), I don't see how "modulating" the standard of proving invalidity and concluding nothing was earned in the examination is not merely a litigator's delight plus runs counter to i4i v. Microsoft as mentioned earlier.
Copyright © 2012 Robert Moll. All rights reserved.
As Professor Lemley states it, "The problem, then, is not that the Patent Office issues large number of bad patents. Rather, it is that the Patent Office issues a small but worrisome number of economically significant bad patents and those patents enjoy a strong, but undeserved, presumption of validity."
Having framed the problem this way, Professor Lemley states his solution: "The Patent Office should focus its examination resources on important patents and pay little attention to the rest."
Before turning to discuss that proposed solution, Professor Lemley asserts what probably won't fix the PTO:
Preventing fee diversion. For the last two decades Congress has diverted 10-20% of the PTO fees to general revenue. Yet in the last several years fee diversion did stop, while the backlog of pending applications grew. My comment is last year the backlog was slightly reduced.
Giving the PTO the authority to set own fees. The PTO may be in the best one to decide fees, but it is unclear which fees should be increased or decreased. For example, examining all applications more intensely is wasteful. Being stricter on allowances reduces the patent maintenance fees that make up for low filing fees. Raising filing fees raises costs on startups at the outset. Increasing a maintenance fee even by a factor of ten ($40,000) won't discourage patent trolls given the potential rewards of patent litigation.
Rejecting bad patents. The vast majority of bad patents are not litigated or licensed so rejecting them is wasteful. Applicants dissatisfied with a rejection can file requests for continued examination (note 53% of pending applications are RCEs) and/or continuations.
Retaining patent examiners. The PTO has a high rate of turn-over, and the median examiner has only been at the PTO for three years. The problem is junior examiners appear to be better at rejecting bad patents than senior examiners.
Outsourcing search. The thinking is examiners are not particularly good at finding relevant prior art so let's outsource this time-consuming task. However, research show examiners rely almost entirely on their own prior art search not the prior art submitted by others.
Next, Professor Lemley asserts what might work:
Second pair of eyes (SPER). Professor Lemley reminds after State Street the PTO initiated SPER to help deal with the flood of business method patents. He notes, however, SPER is asymmetric - two examiners must agree to allow a case while it takes only one examiner to reject a case. This led to 16% allowance rates in contrast to 72% on average. Professor Lemley finds it interesting that the PTO recently shut down SPER program on business methods applications. My comment is SPER over all technology areas would be very expensive, if not wasteful.
Changing examiner incentives. Research indicates much of the problem may be examiner's behavior due to incentives. This section seemed a bit muddled about how and what incentives should change. My experience over the past two decades is the quantity of cases processed sometimes appears to be more important to the PTO than the quality of examination. Whatever the change to incentives, you can count on the examiner's union to resist changes to how the examiners are evaluated and patent attorneys to resist any changes that make it more difficult to get patents.
Tiered review. Professor Lemley now presents his solution that the PTO should focus on important patents and pay little attention to the others, but it is difficult to know which patents are likely to be important. Professor Lemley concedes the government would find it difficult to know, but patent applicants and competitors have better information about the likely value of an invention. Thus, he proposes applicants "gold plate" their patents by paying for an intense search and examination process that would merit a strong presumption of validity. My comment here is (1) startup may be excluded from gold-plating; and (2) the tiered review appears to conflict with the Supreme Court's i4i v. Microsoft decision that the clear and convincing standard for invalidity applies to all US patents.
Oppositions and adversarial evaluations. I agree with Professor Lemley's expectation that the new post-grant and inter partes review will help fix the Patent Office's tendency to issue bad patents at times, but note this addresses bad patents rather than fixes the Patent Office, which to me is about the original examination. Also it will be interesting if the public input reduces the PTO fees for post-grant procedures.
Professor Lemley concludes that (1) reform proposals can never eliminate bad patents because examination is an imperfect process; (2) we will continue to rely on litigation as the primary means for weeding out bad patents; (3) courts should modulate the presumption of validity to match the facts; and (4) clear and convincing must be earned by patent owners.
Despite enjoying Professor Lemley's paper in the end I could only find agreement with Professor Lemley on conclusion (1). With regard to conclusion (2), if reexamination is not the primary means for weeding out bad patents I think it is becoming the best way to attack dubious patents. AIPLA economic survey data shows it's much less expensive than patent litigation even if you factor in the proposed increase in PTO fees. PTO statistics indicate it is effective in eliminating invalid patents as we saw in Oracle v. Google. Further, timely reexamination may result in stays of expensive litigation. With regard to (3) and (4), I don't see how "modulating" the standard of proving invalidity and concluding nothing was earned in the examination is not merely a litigator's delight plus runs counter to i4i v. Microsoft as mentioned earlier.
Copyright © 2012 Robert Moll. All rights reserved.
Wednesday, March 28, 2012
Rating Startup Risk in the Crowdfunding Directory - Patents Already?
The JOBS Act appears likely to pass Congress and to be signed into law by President Obama. If so, it may just "jumpstart our business strength" by increasing the funding of worthy startups that may not pass muster with VCs and angels today. See CNET's Rafe Needleman's Reporters' Roundtable: JOBS Act makes crowdfunding the law which gives various opinions on the likely impact of the JOBS Act.
What's this have to do with patents? In a related article, EquityNet claims crowdfunding patent, Mr. Needleman tells us the change in the law is likely to flush out patents and EquityNet already claims it has a related patent (See U.S. Patent Nos. 7,698,188 and 7,908,194) that evaluates startup risk and matches potential investors with startups. EquityNet CEO Judd Hollas expects that without his patented rating of risk the crowdfunding directory of startups will be "a disorganized mess of results." Sounds like business method patents and I expect that the U.S. Supreme Court's Bilski Section 101 decision will come into play to "organize the mess of patents."
Thanks to Alan Cooper for sending the EquityNet claims crowdfunding patent article!
Copyright © 2012 Robert Moll. All rights reserved.
What's this have to do with patents? In a related article, EquityNet claims crowdfunding patent, Mr. Needleman tells us the change in the law is likely to flush out patents and EquityNet already claims it has a related patent (See U.S. Patent Nos. 7,698,188 and 7,908,194) that evaluates startup risk and matches potential investors with startups. EquityNet CEO Judd Hollas expects that without his patented rating of risk the crowdfunding directory of startups will be "a disorganized mess of results." Sounds like business method patents and I expect that the U.S. Supreme Court's Bilski Section 101 decision will come into play to "organize the mess of patents."
Thanks to Alan Cooper for sending the EquityNet claims crowdfunding patent article!
Copyright © 2012 Robert Moll. All rights reserved.
Saturday, March 24, 2012
AOL Looks to Sell or License More Than 800 Patents
AOL was my first ISP in the 1990s. It was a painful relationship that lasted 2-3 weeks. It might have been shorter, but I was working late in the office many nights so didn't feel the full frustration of working with the snail like dial-up speeds. As a web page slowly loaded one night, I wondered what to do then realized I have time to make a cup of espresso before this loads. But I returned to find not the page, but a lost connection and the need to dial-up again, but wait now the dial-up line is busy....
Not breaking this corporate mold AOL noticed although business is in decline it has over 800 patents. It floats the idea they will yield $1B in licensing income. Does this sound far-fetched? Not in this environment! I expect they will be quickly purchased and/or licensed and the only question is the value and the buyer.
Here are the details: AOL Said to Hire Evercore to Find Patent-Portfolio Buyer
Copyright © 2012 Robert Moll. All rights reserved.
Not breaking this corporate mold AOL noticed although business is in decline it has over 800 patents. It floats the idea they will yield $1B in licensing income. Does this sound far-fetched? Not in this environment! I expect they will be quickly purchased and/or licensed and the only question is the value and the buyer.
Here are the details: AOL Said to Hire Evercore to Find Patent-Portfolio Buyer
Copyright © 2012 Robert Moll. All rights reserved.
Monday, March 19, 2012
PTO America Invents Act Roadshow - Videos and Slides
The PTO America Invents Act (AIA) team recently finished its roadshow on the proposed PTO rules. It visited Alexandria, Boston, Chicago, Dallas, Fort Lauderdale, Salt Lake City, and Sunnyvale, California on the dates below. If you didn't attend, the PTO has given links to videos of the programs as presented in Alexandria, VA and Sunnyvale, CA as well as links to slides in all the cities:
- Opening
Remarks
- Patents:
Pre-issuance Submission and Inventor’s Oath/Declaration
- Patents:
Miscellaneous Post Patent and Supplemental Examination
- Board:
Specific Rules for Post Grant Review, Inter Partes Review, Covered
Business Method Review, and Derivation
- Board:
Umbrella Rules
- Closing Remarks
AIA Roadshow Slides
- Alexandria, VA
(February 17, 2012)
- Sunnyvale, CA (February
24, 2012)
- Salt Lake, UT (February
27, 2012)
- Dallas, TX (February
29, 2012)
- Ft.
Lauderdale, FL (March 2, 2012)
- Boston, MA (March,
5, 2012)
- Chicago, IL (March
7, 2012)
Copyright © 2012 Robert Moll. All rights reserved.
Saturday, March 17, 2012
The Yahoo Patent Offensive - Precipitating Factors?
Today, the CNET article Fred Amoroso: Is this the man behind Yahoo's patent offensive? discusses factors that may have precipitated Yahoo's patent infringement lawsuit against Facebook in March 2012:
- Hiring former Rovi CEO Mr. Amoroso who is reputed to be patent savvy to join the Yahoo board in February 2012
- Yahoo's declining business model
- Yahoo's prior success in signing up Google for a $270M patent license
- Yahoo's relative patent strength over Facebook. Yahoo owns 1,029 patents in contrast to Facebook's 12 patents (The PTO search page indicates Facebook owns 21 patents)
Thursday, March 15, 2012
Ex Parte Adelman - Board Reverses Patent Eligibility Rejections Because Claims Indefinite
In the post on Myspace v. Graphon Corp. I noted the Federal Circuit invalidated claims as not novel (35 USC 102) and obvious (35 USC 103) and sidestepped what some consider a threshold concern: Are the claims directed to subject matter that is eligible for patent protection (35 USC 101)? The Federal Circuit seemed to justify the avoidance of addressing the section 101 defense by noting the law is currently a "murky morass"
The Board of Patent Appeals also recently decided patent eligibility is not a threshold concern. In Ex Parte Adelman the Board reversed the examiner's rejections under 35 USC 101, because the examiner failed to address the critical lack of a concrete definition of the invention. Go Daddy Group appealed claims relating to a system for designating membership in an online business community. Claim 1 recites, among other things, "means for designating a plurality of members" and "means for providing a ... membership designator." The Board stated it wastes resources to consider whether claims are eligible for patent protection or overcome the prior art, when the claims cannot be reasonably understood without resort to speculation. The Board stated the claims were indefinite under 35 USC 112, because the specification failed to disclose algorithm(s) supporting the recited functions in claim 1.
Thus, the "new" threshold concern may be that applicants particularly point out and distinctly claim the invention as required by section 112. See Aristocrat Techs. Australia Party Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1337 (Fed. Cir. 2008); Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1340-41 (Fed. Cir. 2008).
Thus, the "new" threshold concern may be that applicants particularly point out and distinctly claim the invention as required by section 112. See Aristocrat Techs. Australia Party Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1337 (Fed. Cir. 2008); Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1340-41 (Fed. Cir. 2008).
Copyright © 2012 Robert Moll. All rights reserved.
Wednesday, March 7, 2012
Myspace v. Graphon - Federal Circuit Sidesteps Patent Eligibility under 35 USC 101
In the 2010 Bilski decision, the Supreme Court attempted to state a test for what is patent-eligible under 35 USC 101. The Supreme Court rejected that certain categories of subject matter such as business methods or software would be automatically ineligible and that the Federal Circuit's machine-or-transformation test should be the exclusive test. Instead the Supreme Court looking to its own precedent stated laws of nature, natural phenomena, and abstract ideas would be unpatentable.
Since that time the Federal Circuit has struggled to develop a working test for what is an unpatentable abstract idea. Part of the problem is a patent claim is an abstraction of an embodiment of the invention. And the Supreme Court abstract idea test is the ultimate penalty if the abstraction is too great (i.e., the claim is too broad).
In Myspace, Inc. v. Graphon Corp., the Federal Circuit assessed the validity of a software patent relating to creating, modifying, and storing database records over a computer network. The Federal Circuit made several candid and surprising statements: (1) it conceded section 101 is a murky morass that should be avoided when possible; (2) the USPTO may become the source of a workable test (note the Supreme Court implied that the Federal Circuit would further develop the law); (3) patent eligibility was not a threshold question (Bilski states otherwise); and (4) courts should initially evaluate a patent under section 102 (novelty), section 103 (obviousness) and section 112 (written description and enablement) to avoid "the swamp of verbiage that is section 101." Note sidestepping the section 101 defense didn't help as the Federal Circuit then held the patent invalid under sections 102 and 103.
Also see Donald Chisum's Weeds and Seeds in the Supreme Court's Business Method Patents: New Directions for Regulating Patent Scope on this topic.
Copyright © 2012 Robert Moll. All rights reserved.
Since that time the Federal Circuit has struggled to develop a working test for what is an unpatentable abstract idea. Part of the problem is a patent claim is an abstraction of an embodiment of the invention. And the Supreme Court abstract idea test is the ultimate penalty if the abstraction is too great (i.e., the claim is too broad).
In Myspace, Inc. v. Graphon Corp., the Federal Circuit assessed the validity of a software patent relating to creating, modifying, and storing database records over a computer network. The Federal Circuit made several candid and surprising statements: (1) it conceded section 101 is a murky morass that should be avoided when possible; (2) the USPTO may become the source of a workable test (note the Supreme Court implied that the Federal Circuit would further develop the law); (3) patent eligibility was not a threshold question (Bilski states otherwise); and (4) courts should initially evaluate a patent under section 102 (novelty), section 103 (obviousness) and section 112 (written description and enablement) to avoid "the swamp of verbiage that is section 101." Note sidestepping the section 101 defense didn't help as the Federal Circuit then held the patent invalid under sections 102 and 103.
Also see Donald Chisum's Weeds and Seeds in the Supreme Court's Business Method Patents: New Directions for Regulating Patent Scope on this topic.
Copyright © 2012 Robert Moll. All rights reserved.
Monday, March 5, 2012
PTO Publishes Proposed Rules for Inter Partes Review, Post Grant Review, etc.
In February 2012, the USPTO announced publication of its proposed rules for contested cases, including inter partes review, post grant review, the transitional program for covered business methods, and derivation to implement the America Invents Act (AIA). See the details in the links below:
- Proposed Rule of Practice for Trials
before the PTAB (77 Fed. Reg. 6879, Feb. 9, 2012)
- Proposed Trial Practice Guide (77
Fed. Reg. 6868, Feb. 9, 2012)
- Proposed Rules for Inter Partes
Review (77 Fed. Reg. 7041, February 10, 2012)
- Proposed Rules for Post Grant Review
(77 Fed. Reg. 7060, February 10, 2012)
- Proposed Rules for the Transitional
Program for Covered Business Methods (77 Fed. Reg. 7080, February 10,
2012)
- Proposed Rule for the Technological
Invention Definition (77 Fed. Reg. 7095, February 10, 2012)
- Proposed Rule for Derivation Proceedings (77 Fed. Reg. 7028, February 10, 2012)
See the Leahy-Smith America Invents Act Implementation web page for details and the AIA Roadshow schedule in 2012.
Copyright © 2012 Robert Moll. All rights reserved.
Saturday, January 28, 2012
Are Frequently Litigated Patents Different? Yes!
I want to highlight a few points from an article I read tonight: Allison, Lemley, and Walker's, Extreme Value or Trolls on Top? The Characteristics of the Most-Litigated Patents (2009). The authors found most-litigated patents (8 times or more) had quite different characteristics than once-litigated patents:
The abstract states the paper might be useful to guide patent reform, but I think it also indicates what type of patent is likely to be fit for multiple rounds of litigation and what a patent owner should consider if it is heading to litigation. Further, if you plan to enforce or license your patents, you can control nearly all of these characteristics. Even forward citations can be increased by citing to one's previous related patents and published applications. It is not simply a numbers game, as additional relevant references will strengthen validity of a patent and diversity of claims of different scope give more options on what one can assert in litigation. If you are interested in patent strategy, defense or offense, this paper is worth reading.
Copyright © 2012 Robert Moll. All rights reserved.
- 70% of the most-litigated patents are software patents
- 72% of the most-litigated patents are in the computer industry
- The most-litigated patents are disproportionately owned by non-practicing entities (i.e., patent trolls)
- The most-litigated patents include more claims (39 claims v. 24 claims in terms of mean)
- They cite more prior art, backward citations, in terms of means and rounding to nearest integer:
- 61 to 23 US patents
- 9 to 4 Foreign patents
- 53 to 6 Non-patent references (printed publications)
- Later issued patents more often cite the most-litigated patents, forward citations
- The most-litigated patents are part of a patent family with more continuations and divisionals
The abstract states the paper might be useful to guide patent reform, but I think it also indicates what type of patent is likely to be fit for multiple rounds of litigation and what a patent owner should consider if it is heading to litigation. Further, if you plan to enforce or license your patents, you can control nearly all of these characteristics. Even forward citations can be increased by citing to one's previous related patents and published applications. It is not simply a numbers game, as additional relevant references will strengthen validity of a patent and diversity of claims of different scope give more options on what one can assert in litigation. If you are interested in patent strategy, defense or offense, this paper is worth reading.
Copyright © 2012 Robert Moll. All rights reserved.
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