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For the next Two Weeks, Google is Buying Patents

By Stephen B. Schott

Do you have a patent you want to sell? Want to sell it to one of the biggest companies in the world? You might have a partner in Google.

How to Participate

googThrough May 22, Google is buying patents through an experimental Patent Purchase Promotion. The transaction process is simple. Patent owners go to this site, fill out some forms, name their price, then wait to hear from Google, who will finalize the form assignment agreement and wire the asking price, if it is interested.

The Details

Here’s how it works.

  • Google is only buying one patent at a time. If you have more than one patent you want to sell, you need to complete the form multiple times.
  • Google is only interested in US patents for now.
  • Google is not interested in your patent if you/your company share ownership in the patent.
  • Your patent cannot be subject to litigation, encumbrances, etc.
  • You must have the authority to sell the patent.
  • You must provide an asking price.
  • All terms in Google’s Patent Purchase Agreement are nonnegotiable.
  • You will retain a license back to your patent. The license is “irrevocable, non­exclusive, non­transferable, non­assignable (including by operation of law or otherwise), non­sublicensable, worldwide, [and] fully paid­ up.”
  • Google will let you know by June 26, 2015 if it tentatively accepts your offer and if it does, it will request more information from you. 
  • Upon finalization of the agreement, Google will wire the asking price amount to you.

Why is Google Doing This?

In its announcement about the Patent Purchase Promotion, Google states that

We view this as an experiment. We are looking for ways to help improve the patent landscape, and we hope that by removing some of the friction that exists in the secondary market for patents, this program might yield better, more immediate results for patent owners versus partnering with non­practicing entities.

dreamstime_xs_34612811Google’s employee Code of Conduct and unofficial Mission Statement is “Don’t be evil.” You have to read between the lines of the announcement and Google’s mission statement, and its previous criticism of nonpracticing entities (NPEs, often called patent trolls) to figure out Google’s possible motivation.

Google has long been in tension with patent trolls, and is regularly in the top 10 of companies most sued by NPEs. Gene Quinn at IPWatchdog argues that Google promotes the demise of the patent system. I’m fairly certain that Google is not actively promoting the demise of the patent system, but it is almost certainly trying to take on NPEs.

One of the problems with attacking NPEs is that they often buy patents from smaller inventors who don’t have resources to sue, license, or transact business around their patents. Thus the NPEs play a critical role in the idea economy–creating a marketplace for ideas.

Google, in buying patents, is entering the NPE arena and hoping to also become a buyer of ideas. In so doing, Google itself is taking on the role of NPE because it states that it “can license [the purchased patents] to others, etc.” It’s hard to see how this plays out, but I suppose the optimistic among us would hope that Google’s “Don’t be evil” will prevail over any nefarious use of the purchased patents.

Should you try this?

If you have a patent that is generating no value for you, or that has an upcoming maintenance fee that you don’t want to pay, you might want to give this try. Might be like getting money for nothing. You also might sign up to see if Google will give you more money than you think your patent is worth.

If you have questions, contact me.

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John Oliver’s Anti-Patent-Troll Rant: Simple Thinking

By Stephen B. Schott

last-week-tonightUp is down and right is left when my inbox fills up with 10 friends linking me to something about patents. But this floppy-watches-hanging-from-trees moment came recently after comedian John Oliver, during his Last Week Tonight show, took on patent trolls. In doing so, he follows comedian Adam Corolla, who also had an anti-patent troll rant go viral (for patent news) last year.

Take a gander: It’s possibly not safe for work on language.


My favorite line, of a few that were excellent, is his comparison of patents to “legally binding ‘dibs.'” Unfortunately, as with his rant about pharmaceutical companies marketing to doctors, Oliver took the easy route and attacked a few bad actors who everyone would dislike and ignored many other businesses that fulfill an important role in the idea economy.

Who are these patent trolls?

Patent trolls prefer to be called non-practicing entities or NPEs, but the patent troll term is too pejoratively inviting to go away. The problem of patent trolls is, as my friends across the Atlantic might say, a sticky wicket. A lot of people feel like there’s some kind of a problem but no one seems to agree on who’s an actual troll.

A few examples illustrate the difficulty of defining a patent troll. Let’s say that a major automobile manufacturer invests several million dollars developing a new diesel engine. Along the way, it secures 50 patents on the technology, but then decides not to pursue the diesel engine and instead focuses on hybrid engines. A few years pass and one of its competitors releases a diesel engine using the patented technology. Is our automobile manufacturer a troll if it pursues the competitor for patent infringement, just because it didn’t produce the diesel engines?

Another problem example that commonly arises is universities, which are petri dishes of innovation that rarely make any products. Most universities do, however, have a technology transfer office that secures patent protection for innovations. If a university sees a company using its patented technology and approaches the company seeking a royalty, is the university a troll that should be punished?

And a third category is also troublesome. Picture a small business that invents a new technology and secures a patent on it. Later, a multinational corporation starts using the technology. The small business doesn’t have millions of dollars to bring a patent infringement lawsuit so it sells its patent to a third party who has enough money to bring the lawsuit. In this David and Goliath scenario, small-business David needed a sling, and the third party provided it. The third party may be in the business of nothing more than collecting promising patents—but legislation attacking the third party patent collector harms the small business and stifles innovation.

At the other end of the spectrum is an example where a patent attorney purchased a patent from an inventor. The patent was for a consumer product. The patent-owner/attorney sued a manufacturer for infringement even though it was clear that there was no infringement. The manufacturer was faced with a terrible decision tree: Choice 1: Pay the patent-owner a small amount of money to settle the lawsuit, or Choice 2: Pay litigation costs (hundreds of thousands of dollars at least) to win the lawsuit and pray for the never-to-be-found Questing Beast that is judge-awared attorney’s fees for bringing a frivolous lawsuit. Choice 1, as painful as it is, is often the better business decision. So yes, there are definitely bad patent trolls.

The Problems With Oliver’s Rant

One of the biggest problems with the Oliver rant is that he fails to acknowledge that in the last two years, a lot has happened to curb bad actors in the patent world. Patent litigation is down 20% in the last year. The most-abused patents, those based on software, are now undergoing heightened legal scrutiny following the Alice Supreme Court case. The US Patent and Trademark Office has set up several new procedures for challenging the validity of granted patents. In all, a lot of work has already been done to fix this problem: The laws, procedures, and cases are having an effect.

dreamstime_xs_8645058Another problem, and perhaps it is obvious from the above descriptions of trolls, is that some of these patent entities help, not hurt, smaller inventors. Patent enforcement is expensive, and without patent entity companies help smaller companies enforce their patent rights against infringers. Thus, many trolls fill an economic need by helping small inventors protect their rights when the costs for doing so get too high.

Oliver encourages more legal action to curb patent trolls, but no one yet knows how all the solutions that were enacted in the last 2 years will play out. In the end, Oliver will hopefully get his dream of fewer true trolls and more innovation, but that will take time and politicians should be careful not to create more problems in their haste to react to the anti-troll sentiment.

If you have questions, contact me.

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The USPTO’s Alice-Based Patentable Subject Matter Hypotheticals with Boilerplate Responses

By Stephen B. Schott

www.masterplaques.comThe USPTO recently published hypotheticals to help guide applicants when defining patentable subject matter. Instead of just a case law review, the office provided claim drafting examples. While not legally binding, these provide a helpful roadmap for practitioners when addressing subject matter rejections. I’ve parsed the hypotheticals below and for each one, provided a sample argument that practitioners might make at the USPTO based on each of the hypotheticals that found claims to be patentable.

Because this is a longer article, I created a summary page of the sample arguments to overcome the USPTO’s subject matter rejections.

Patentable Subject Matter Eligibility Test

The USPTO applied the test that has become well-known following the Supreme Court’s Alice v. CLS Bank case.

Slide1

In each of the hypotheticals, the USPTO applied the three-part test pictured above and summarized below that follows the developing case law on this subject.

(1) Is the claim directed to one of the four patent-eligible subject matter categories: process, machine, manufacture, or composition of matter? If no, the claim is does not patentable. If yes, move to (2).
(2) Is the claim directed to an abstract idea that is a judicial exception to the categories in (1), such as a fundamental economic practice, a method of organizing human activity, an idea itself (standing alone), or a mathematical relationship? If no, the claim contains patent-eligible subject matter. If yes, go to (3).
(3) When taken as a whole, does the claim have additional limitations that amount to significantly more than the abstract idea? If no, the claim is not patentable. If yes, the claim contains patent eligible subject matter.

Hypothetical 1: Removing Malicious Code From Emails

In this hypothetical, the email scanning operation is done in a quarantined memory sector. The hypothetical claim reads:

1. A computer-implemented method for protecting a computer from an electronic communication containing malicious code, comprising executing on a processor the steps of:
receiving an electronic communication containing malicious code in a computer with a memory having a boot sector, a quarantine sector and a non-quarantine sector;
storing the communication in the quarantine sector of the memory of the computer, wherein the quarantine sector is isolated from the boot and the non-quarantine sector in the computer memory, where code in the quarantine sector is prevented from performing write actions on other memory sectors;
extracting, via file parsing, the malicious code from the electronic communication to create a sanitized electronic communication, wherein the extracting comprises scanning the communication for an identified beginning malicious code marker, flagging each scanned byte between the beginning marker and a successive end malicious code marker, continuing scanning until no further beginning malicious code marker is found, and creating a new data file by sequentially copying all non-flagged data bytes into a new file that forms a sanitized communication file;
transferring the sanitized electronic communication to the non-quarantine sector of the memory; and
deleting all data remaining in the quarantine sector.

Following the subject matter analysis steps above:

(1) Is the claim directed to one of the four patent-eligible subject matter categories: process, machine, manufacture, or composition of matter? YES because it’s a process. Move to (2).
(2) Is the claim directed to an abstract idea that is a judicial exception to the categories in (1), such as a fundamental economic practice, a method of organizing human activity, an idea itself (standing alone), or a mathematical relationship? NO because it is directed towards physically isolating a received communication on a memory sector and extracting malicious code from that communication to create a sanitized communication in a new data file. The USPTO points out that this solution is inextricably tied to the technology and thus not an abstract idea that fits into the judicial exceptions. Therefore, the claim is patent eligible.

Quote to use when responding to a subject matter rejection at the USPTO. When responding to a rejection at the USPTO, you might try a response along these lines.

The current claim is similar to hypothetical 1 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015. In that hypothetical the USPTO pointed out that the claim was patentable because an email communication was isolated in a memory sector and thus inextricably tied to computer technology. In the current claim, the [claim element] is inextricably tied to computer technology, and is thus patent-eligible subject matter.

Hypothetical 2: E-Commerce Outsourcing System/Generating a Composite Web Page 

This hypothetical is based on DDR Holdings, LLC v. Hotels.com et al discussed in detail here.?????????????????????????????????????????????????????????????????????????

In the patented system, a customer who clicks on an advertising link is not transported from the host web page to the merchant’s web page, but instead is re-directed to a composite web page that combines product information associated with the selected item and visually perceptible elements of the host web page.

The claim is as follows: (The USPTO’s analysis considers two similar claims.)

19. A system useful in an outsource provider serving web pages offering commercial opportunities, the system comprising:
(a) a computer store containing data, for each of a plurality of first web pages, defining a plurality of visually perceptible elements, which visually perceptible elements correspond to the plurality of first web pages;
(i) wherein each of the first web pages belongs to one of a plurality of web page owners;
(ii) wherein each of the first web pages displays at least one active link associated with a commerce object associated with a buying opportunity of a selected one of a plurality of merchants; and
(iii) wherein the selected merchant, the outsource provider, and the owner of the first web page displaying the associated link are each third parties with respect to one other;
(b) a computer server at the outsource provider, which computer server is coupled to the computer store and programmed to:
(i) receive from the web browser of a computer user a signal indicating activation of one of the links displayed by one of the first web pages;
(ii) automatically identify as the source page the one of the first web pages on which the link has been activated;
(iii) in response to identification of the source page, automatically retrieve the stored data corresponding to the source page; and
(iv) using the data retrieved, automatically generate and transmit to the web browser a second web page that displays:
(A) information associated with the commerce object associated with the link that has been activated, and
(B) the plurality of visually perceptible elements visually corresponding to the source page.

Following the subject matter analysis steps above:

(1) Is the claim directed to one of the four patent-eligible subject matter categories: process, machine, manufacture, or composition of matter? YES because it’s a machine. Move to (2).
(2) Is the claim directed to an abstract idea that is a judicial exception to the categories in (1), such as a fundamental economic practice, a method of organizing human activity, an idea itself (standing alone), or a mathematical relationship? NO because “the claim addresses a business challenge (retaining website visitors) that is particular to the Internet.” The USPTO points out that the claim does not “merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks,” quoting the DDR holding. Therefore, the claim is patent-eligible. The USPTO (and Federal Circuit) went on to step 3 and thus it’s worth reviewing as well.
(3) When taken as a whole, does the claim have additional limitations that amount to significantly more than the abstract idea? The DDR court and USPTO note that “’not all claims purporting to address Internet-centric challenges are eligible, “but in this case these additional limitations amount to more than simply stating “apply the abstract idea on the Internet.” Thus, under this third prong, the subject matter is patent-eligible subject matter.

Quote to use when responding to a subject matter rejection at the USPTO. When responding to a rejection at the USPTO, you might try a response along these lines:

The current claim is similar to hypothetical 2 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015. In that hypothetical the USPTO pointed out that the claim was patentable because the claim addressed a business challenge (retaining website visitors) that is particular to the Internet, which is not among the judicial exceptions to patentable subject matter. In the current claim, the [claim element] also addresses a business challenge that is particular to the Internet, and is thus patent-eligible subject matter. And even if the claim were to be found to fit into one of the judicial exceptions to patentable subject matter, the additional limitations in the claim directed to [claim element] amount to more than simply stating “apply the abstract idea on the Internet.” See also DDR Holdings, LLC v. Hotels.com et al., 113 USPQ2d 1097 (Fed. Cir. 2014).

Hypothetical 3:Digital Image Processing  

?????????????????????????????????????????????????????????????????????????????????????????????????????????????????This hypothetical is based on Research Corporation Technologies, Inc. v. Microsoft Corp.

In the patented method, “the inventor has improved upon previous halftoning techniques by developing an improved mask called a “blue noise” mask. The blue noise mask requires less memory than previous masks and results in a faster computation time while improving image quality. The blue noise mask is produced through an iterative mathematical operation that begins with generating a dot profile with blue noise properties from an image at a 50% gray level using a blue noise filter. Subsequently, additional dot profiles are generated at differing gray levels. As pixels of the dot profile change across the gray levels, these changes are encoded in a cumulative array. Once all the dot profiles are built, the cumulative array becomes the blue noise mask.”

The claim is as follows: (The USPTO’s analysis considers 3 similar claims.)

1. A computer-implemented method for halftoning a gray scale image, comprising the steps of:
generating, with a processor, a blue noise mask by encoding changes in pixel values
across a plurality of blue noise filtered dot profiles at varying gray levels;
storing the blue noise mask in a first memory location;
receiving a gray scale image and storing the gray scale image in a second memory
location;
comparing, with a processor on a pixel-by-pixel basis, each pixel of the gray scale image
to a threshold number in the corresponding position of the blue noise mask to produce a binary
image array; and
converting the binary image array to a halftoned image.

Following the subject matter analysis steps above:

(1) Is the claim directed to one of the four patent-eligible subject matter categories: process, machine, manufacture, or composition of matter? YES because it’s a process. Move to (2).
(2) Is the claim directed to an abstract idea that is a judicial exception to the categories in (1), such as a fundamental economic practice, a method of organizing human activity, an idea itself (standing alone), or a mathematical relationship? YES because “the mathematical operation of generating a blue noise mask is recited in the claim, [and thus,] the claim is “directed to” a judicial exception.”  Move to (3).
(3) When taken as a whole, does the claim have additional limitations that amount to significantly more than the abstract idea? YES, for two reasons. First, “tie the mathematical operation (the blue noise mask) to the processor’s ability to process digital images. These steps add meaningful limitations to the abstract idea of generating the blue noise mask and therefore add significantly more to the abstract idea than mere computer implementation.” Second, “the claimed process with the improved blue noise mask allows the computer to use to less memory than required for prior masks, [resulting] in faster computation time without sacrificing the quality of the resulting image as occurred in prior processes [which in turn] produces an improved digital image. These are also improvements in the technology of digital image processing.” Thus, under this third prong, the subject matter is patent-eligible subject matter.

Quote to use when responding to a subject matter rejection at the USPTO. When responding to a rejection at the USPTO, you might try a response along these lines:

The current claim is similar to hypothetical 3 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015, which is based on Research Corporation Technologies Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010). In that hypothetical the USPTO pointed out that the claim was patentable because tying the mathematical operation to the processor’s ability to process digital images added significantly more to the abstract idea. In the current claim, [claim element] similarly ties the [algorithm] to the processor’s ability to [perform the claim element]. Further, in the hypothetical, the  USPTO notes that the algorithm allows the computer to use less memory than required for prior masks, which allows the computer to to use less memory. Similarly in the current claim, the [claim element] allows a computer to use less memory, which amounts to an innovation in computer technology that adds significantly more to the abstract idea. Thus, [claim #] is patentable subject matter.

Hypothetical 4: Global Positioning System

This hypothetical is based on SiRF Technology Inc. v. International Trade Commission.

In the patented system, the systems and methods in which a server wirelessly coupled to a mobile GPS receiver uses a mathematical model to solve for the mobile receiver position without receiving satellite positioning data or absolute time information from a satellite. These systems and methods improve GPS techniques by enabling the mobile GPS receiver to determine its position more accurately and improve its signal-acquisition sensitivity to operate even in weaksignal environments. In particular, the mobile GPS receiver is a mobile device that includes 10 examples: Abstract Ideas GPS antenna, a GPS receiver, a microprocessor, a display, and a wireless communication transceiver. Using mathematical formulas, the device calculates pseudo-ranges (estimated ranges from the GPS receiver to each satellite in view) based on PN codes received from the satellites, and the transceiver sends the pseudo-ranges to the server.

The claim is as follows: (The hypothetical considers 2 similar claims.)

1. A system for calculating an absolute position of a GPS receiver and an absolute time of
reception of satellite signals comprising:
a mobile device comprising a GPS receiver, a display, a microprocessor and a wireless
communication transceiver coupled to the GPS receiver, the mobile device programmed to
receive PN codes sent by a plurality of GPS satellites, calculate pseudo-ranges to the plurality of
GPS satellites by averaging the received PN codes, and transmit the pseudo-ranges, and
a server comprising a central processing unit, a memory, a clock, and a server
communication transceiver that receives pseudo-ranges from the wireless communication
transceiver of the mobile device, the memory having location data stored therein for a plurality
of wireless towers, and the central processing unit programmed to:
estimate a position of the GPS receiver based on location data for a wireless tower
from the memory and time data from the clock,
calculate absolute time that the signals were sent from the GPS satellites using the
pseudo-ranges from the mobile device and the position estimate,
create a mathematical model to calculate absolute position of the GPS receiver based
on the pseudo-ranges and calculated absolute time,
calculate the absolute position of the GPS receiver using the mathematical model, and
transmit the absolute position of the GPS receiver to the mobile device, via the server
communication transceiver, for visual representation on the display.

Following the steps above,

(1) Is the claim directed to one of the four patent-eligible subject matter categories: process, machine, manufacture, or composition of matter? YES because it’s a machine. Move to (2).
(2) Is the claim directed to an abstract idea that is a judicial exception to the categories in (1), such as a fundamental economic practice, a method of organizing human activity, an idea itself (standing alone), or a mathematical relationship? YES because the claim recites mathematical operations. Move to (3).
(3) When taken as a whole, does the claim have additional limitations that amount to significantly more than the abstract idea? YES because the combination of elements impose meaningful limits in that the mathematical operations are applied to improve an existing technology (global positioning) by improving the signal-acquisition sensitivity of the receiver to extend the usefulness of the technology into weak-signal environments and providing the location information for display on the mobile device. Thus, under this third prong, the subject matter is patent-eligible subject matter.

Quote to use when responding to a subject matter rejection at the USPTO. When responding to a rejection at the USPTO, you might try a response along these lines:

The current claim is similar to hypothetical 4 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015, which is based on SiRF Technology Inc. v. International Trade Commission, 601 F.3d 1319 (Fed. Cir. 2010). In that hypothetical, the USPTO pointed out that the claim was patentable because the claim improves an existing technology (global positioning) by improving the signal-acquisition sensitivity of the receiver to extend the usefulness of the technology into weak-signal environments and providing the location information for display on the mobile device. Similarly, [claim element] improves [technology] and adds significantly more to the abstract idea. Thus, the subject matter is patent-eligible subject matter.

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Four Boilerplate Responses for Responding to Subject Matter Rejections Based on the USPTO Hypotheticals

By Stephen B. Schott

This is a summary of the sample argument sections of a longer article based on the USPTO’s subject matter-based hypotheticals.

Hypothetical 1: Removing Malicious Code From Emails

When responding to a rejection at the USPTO, you might try a response along these lines.

The current claim is similar to hypothetical 1 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015. In that hypothetical the USPTO pointed out that the claim was patentable because an email communication was isolated in a memory sector and thus inextricably tied to computer technology. In the current claim, the [claim element] is inextricably tied to computer technology, and is thus patent-eligible subject matter.

Hypothetical 2: E-Commerce Outsourcing System/Generating a Composite Web Page 

When responding to a rejection at the USPTO, you might try a response along these lines.

The current claim is similar to hypothetical 2 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015. In that hypothetical the USPTO pointed out that the claim was patentable because the claim addressed a business challenge (retaining website visitors) that is particular to the Internet, which is not among the judicial exceptions to patentable subject matter. In the current claim, the [claim element] also addresses a business challenge that is particular to the internet, and is thus patent-eligible subject matter. And even if the claim were to be found to fit into one of the judicial exceptions to patentable subject matter, the additional limitations in the claim directed to [claim element] amount to more than simply stating “apply the abstract idea on the Internet.” See also DDR Holdings, LLC v. Hotels.com et al, 113 USPQ2d 1097 (Fed. Cir. 2014).

Hypothetical 3:Digital Image Processing  

When responding to a rejection at the USPTO, you might try a response along these lines.

The current claim is similar to hypothetical 3 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015, which is based on Research Corporation Technologies, Inc. v. Microsoft Corp, 627 F.3d 859 (Fed. Cir. 2010). In that hypothetical the USPTO pointed out that the claim was patentable because tying the mathematical operation to the processor’s ability to process digital images added significantly more to the abstract idea. In the current claim, [claim element] similarly ties the [algorithm] to the processor’s ability to [perform the claim element]. Further, in the hypothetical, the  USPTO notes that the algorithm allows the computer to use less memory than required for prior masks, which allows the computer to to use less memory. Similarly in the current claim, the [claim element] allows a computer to use less memory, which amounts to an innovation in computer technology that adds significantly more to the abstract idea. Thus, [claim ##] is patentable subject matter.

Hypothetical 4: Global Positioning System

When responding to a rejection at the USPTO, you might try a response along these lines.

The current claim is similar to hypothetical 4 in the USPTO’s Abstract Ideas Hypotheticals published on January 27, 2015, which is based on SiRF Technology Inc. v. International Trade Commission, 601 F.3d 1319 (Fed. Cir. 2010). In that hypothetical, the USPTO pointed out that the claim was patentable because the claim improves an existing technology (global positioning) by improving the signal-acquisition sensitivity of the receiver to extend the usefulness of the technology into weak-signal environments and providing the location information for display on the mobile device. Similarly, [claim element] improves [technology] and adds significantly more to the abstract idea. Thus, the subject matter is patent-eligible subject matter.

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The Federal Circuit Breathes More Life Into Claim Preambles

By Stephen B. Schott

?????????????????????????????????????????????????????????????Claim preambles are given little weight in claim interpretation, which is seemingly incongruous with the amount of scrutiny courts give to all the other words in patent claims. But the Federal Circuit recently breathed just a little more life into preambles in Pacing Technologies, Inc. v. Garmin International, Inc.

The decision focused on US patent 8,101,843 claim 25:

A repetitive motion pacing system for pacing a user comprising:
a web site adapted to allowing the user to pre-select from a set of user-selectable activity types an activity they wish to perform and entering one or more target tempo or target pace values corresponding to the activity;
a data storage and playback devices; and
a communications device adapted to transferring data related to the pre-selected activity or the target tempo or the target pace values between the web site and the data storage and playback device.

In explaining its decision, the Federal Circuit repeatedly referred to claim 25’s preamble, pointing out how certain preamble terms affect the meaning of terms later in the claims.

Claim 25’s preamble uses two terms, “user” and “repetitive motion pacing system” that are then referred back to in subsequent claim elements. The Federal Circuit pointed out that this construction made claim 25’s preamble language so important to the entirety of the patent as to render it a “necessary component of the claimed invention,” and therefore “limiting.”

Does this case elevate the importance of claim preambles, and, if so, will it change the way that practitioners structure them? It’s hard to know if the import of preambles is now elevated or whether this case will stand by itself, but in either case, practitioners would be wise to craft preambles with care.

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Towards More Reliable Trial Court Decisions on Claim Construction

By Stephen B. Schott

dreamstime_xs_225321The Federal Circuit, which has exclusive domain over patent-related appeals, overrules district court findings at an alarming rate. The Supreme Court has decided that turnabout is fair play. Continuing a string of reversals or at least in this case remands, the Supreme Court recently overturned years of Federal Circuit precedent and outlined a new standard of review for claim interpretation in patent litigation.

Teva v. Sandoz focused on the question of an active pharmaceutical ingredient claimed as having “a molecular weight of 5 to 9 kilodaltons.” This may seem definite but the district court thought otherwise, noting that there are 3 methods of calculating molecular weight: the weight of the most prevalent molecule, the weight of the average of all molecules, or a weighted average where heavier molecules contribute more to the calculation.

The trial court heard expert testimony on which of these definitions would be proper, found that there was no conclusive definition, and thus concluded that the claims were invalid because they were indefinite. The patent owner (Teva) appealed that holding to the Federal Circuit.

The Federal Circuit has different “standards of review” depending on what it is reviewing. Before the Teva case, when the Federal Circuit interpreted claims, it followed a de novo “from the beginning” review standard, meaning that it interpreted the claims anew, giving little deference to all the work the trial court did in interpreting the claims.

Ignoring a trial court’s analysis has been a controversial topic because trial court judges spend a lot of time getting to know the parties, their experts, inventors, and the facts surrounding the case during the trial process. The de novo standard, however, the Federal Circuit disregards much of that work and looks at just the paper record to interpret the claims.

In Teva, the Supreme Court abandons the de novo standard of review of a trial court’s claim interpretation, in part. The “in part” is a fine blade the Supreme Court draws through claim interpretation. One of the district court judge’s jobs is to determine the facts, and claim interpretation involves a mixed effort of interpreting facts (for example, expert and inventor testimony) and law (the words of the claims themselves, the patent specification) to arrive at a claim interpretation.

The Supreme Court says that the Federal Circuit can no longer review matters of fact in claim interpretation de novo, but instead must review them for “clear error,” which means that a district court judge’s reliance on facts like expert testimony will be no longer ignored; instead, a judge’s reliance on facts will be given substantial deference.

This is a boon for experts, no doubt. It should also make District Court decisions on claim interpretation less prone to being overturned. Since many claim interpretation decisions are case dispositive, and the claim interpretation decisions happen before expensive patent trials, this may reduce the total costs for patent litigation in the future.

imgresIn a lengthy dissent, Justice Thomas, joined by Justice Alito, argues that claim construction is a mixed question of fact and law that should be decided as a matter of law under the de novo standard.

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Can I get an international patent? PCT application basics.

By Stephen B. Schott
An Article in Schott, PC’s IP Law for Startups Series

???????????????????????????????????????????????????????????????“Can I file for an international patent?” This is a common question. There’s one simple answer and one extended one.

The simple answer is that there is no international patent. Patents can only be enforced in the countries where they are valid. There is one exception: a new patent called a European Unitary Patent that applies to many countries in Europe. With that limited exception, no granted patent can be enforced in more than one country.

The longer answer involves whether there is such a thing as an international patent application. And the answer to that question is yes. You can file an international patent application under the Patent Cooperation Treaty. This application is commonly called a PCT application. Within 30 months* of its filing, you may enter the PCT application into countries that are parties to the Patent Cooperation Treaty and undergo each country’s examination process.

Here’s a short summary of how the PCT application process works, including a timeline. Clicking on a box in the timeline will take you to a short description.

File a US or other national patent application. Many inventors start the patent process by filing in their local country. This establishes a date “0” on the timeline called the application’s priority date. Once you file any local application, including a US provisional application, you have 12 months to file a PCT application with a claim to the priority date.

File PCT application. A PCT application is generally written in the same format as a US nonprovisional application, so if you already filed your application in the US, it should require minimal attorney revision for filing in the PCT. Put another way, you should expect to pay a lot less in attorney fees when filing the PCT application if you filed a US nonprovisional application. The official fees due to governmental agencies, however, are much higher in the PCT. Filing a PCT application and prepaying all examination fees will cost about $3,500.00 for a large entity (larger companies) and $2,500.00 for a small entity (small companies).

You must file the application within a Receiving Office (usually in your own country) and identify a Search Authority (the examination group that will examine your application).

International Search Report and Written Opinion. After filing the PCT application, you will receive an International Search Report (sometimes called the ISR) and Written Opinion. The ISR is a summary of the references that an examiner found when searching for references related to your application’s claims and a summary of their relevance. The Written Opinion is a detailed report regarding the application, including an identification of any deficiencies.

PCT Publication. 18 months from the priority date, the International Bureau responsible for your application publishes your application for public viewing.

File a Demand for International Preliminary Examination. This step is optional. The deadline for filing a demand is 22 months from the priority date or 3 months from the issuance of the ISR and Written Opinion, whichever comes later. Often you will file a demand with a written response and amendments to your application in response to the ISR and Written Opinion.

International Preliminary Examination. The International Preliminary Examination Report (IPRP) is the Search Authority’s final conclusion on the patentability of your claims based on either your original application or amendments made by you during the process. The Search Authority will indicate whether the claims have novelty and inventive step (inventive step is similar to nonobviousness in the US). The Search Authority’s conclusion does not mean that you will get a patent in any country, but it can be an indicator that you will receive positive or negative treatment as you enter your application into individual countries.

Enter National Phase Applications. At this phase, you can enter your PCT application, largely as is or with amendments, into each individual country (or in Europe as a European Unitary Patent). You can even enter it in the US if you did not do so before. You will have to pay each countries’ filing fees, as well as each countries’ attorney fees to handle the filings, which can get quite costly. If you have questions, contact me.

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* For Luxembourg, Tanzania, Uganda, the deadline is 20 months. For a few other countries the deadline is more than 30 months.

Most (and Least) Popular IdeaEsq Articles of 2014

By Stephen B. Schott

????????????????????????????????????????????????????????????????????In 2014, I published 39 articles. My goal was one a week so I fell short, even counting some lame efforts. But still, 39 is a good number and based on the analytics, here are the top and bottom three articles from the last year. Please be kind to those bottom three. They need your love, too.

The Top Three IdeaEsq Articles of 2014

Number ThreeThe Ten Most Important Patent Cases. When I click on blog articles that list “The top five ___” and “Six ways to ___,” I feel dirty. Something about the number in the headline knocks down my ability to resist the link and I just want to see the list. I don’t know why we humans are stupid like this but we are. This was my earliest effort at selling the irresistible drug that is the “number-list” title. I tried to stay away from it over the course of the year but I did do a companion piece later titled The Ten Most Important Trademark Cases. Go ahead and try to resist clicking.

Number TwoUsing “Configured to” in Patent Claims. Make no mistake, dear reader: You are a fun bunch and that’s why this article shot up the charts to number two. Go ahead and read up on this now. I promise you’ll be a hit at your New Year’s party.

Number One. Demystifying the Final Office Action: Seven Options for Responding to a USPTO Final Office Action. This article gets more hits than any page on my entire website so clearly it hit a nerve. Hundreds of people find their way here every single week. I’ve written so many more amusing and helpful articles, but you love this one the most. Do me a favor, though–take a look at the dunce brigade below and see if you don’t agree that they are more fun.

The (Unloved) Bottom Three IdeaEsq Articles of 2014

Number three unloved. Schott, PC Sponsors World Cup Contest. Yeah OK, this was blatant self-promotion. But it was the summer of the World Cup and I was excited about soccer. You punished me by not reading it and I thank you for the lesson learned.

Number two unloved. Hot Off the Press: Updates to USPTO Practice. I’m happy this one is so low: It’s down right dull as dull can be. Informative, yes. But the fun factor was lacking. I tried to fool you with “hot off the press” but you saw through my ruse.

Number One, the biggest loser of them all.  Patent Haikus. I’d like to thank my proofer for reading this post but according to Google Analytics, even she didn’t look at it. The good news is that if you Google “patent” and “haiku,” this is the only relevant hit. How can you not love:

subject matter test
machine or transformation
incomplete says Court

It’s gold, people. Solid gold.

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Federal Circuit Identifies Software as Patentable Subject Matter (post Alice)

By Stephen B. Schott

dreamstime_xs_8424111_med_hrSoftware has been patentable subject matter for a long time but following this summer’s Supreme Court Alice v. CLS Bank decision, exactly when software crosses into patentable subject matter territory has been in flux. Last week, the Federal Circuit’s DDR Holdings, LLC v. Hotels.com, L.P. et al. decision provided some guidance on this point.

The patent in dispute describes what seems commonplace technology today: Sometimes when you go to a website, you’ll click a link and instead of the link taking you to a new web page, the link opens a window within the website you’re currently on. When this application was filed in 1998, it was a new idea. The inventors claimed their invention as follows:

19. A system useful in an outsource provider serving web pages offering commercial opportunities…comprising:
(a) a computer store containing data, for each of a plurality of first web pages, defining a plurality of visually perceptible elements… (ii) wherein each of the first web pages displays at least one active link associated with a commerce object associated with a buying opportunity…
(b) a computer server at the outsource provider, which computer server is coupled to the computer store and programmed to: (i) receive from the web browser of a computer user a signal indicating activation of one of the links displayed by one of the first web pages; …
using the data retrieved, automatically generate and transmit to the web browser a second web page that displays: (A) information associated with the commerce object associated with the link that has been activated, and (B) the plurality of visually perceptible elements visually corresponding to the [first] page.

Facing the question about whether this claim recited patent-eligible subject matter, the court looked to the Supreme Court’s Alice two part test: (1) Determine if the claimed invention covers an abstract idea, and if (1) is satisfied, (2) determine if the claim amounts to “significantly more” than a patent on an ineligible concept.

Turning to the first part of the test regarding whether the claims recite a patent-ineligible abstract idea, the court pointed out that even the patent’s owner struggled to define the abstract idea and in the end, suggested several ways “including ‘making two web pages look the same,’ ‘syndicated commerce on the computer using the Internet,’ and ‘making two e-commerce web pages look alike by using licensed trademarks, logos, color schemes and layouts.’”

Rather than identify which of these was the abstract idea itself, the court determined that no matter which of these characterizations it chose, the second test prong requiring “something more” would be satisfied.

The Big Money Quote. The court distinguished the website-within-a-website claims as “something more” than what had come before with the following reasoning that should be quoted in every software prosecution before the US Patent and Trademark Office for the foreseeable future: “[T]hese claims stand apart because they do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.

The court also approvingly noted that the claimed additional features “ensure the claims are ‘more than a drafting effort designed to monopolize the [abstract idea]’…In short, the claimed solution amounts to an inventive concept for resolving this particular Internet-centric problem, rendering the claims patent-eligible.”

The court’s rationale is not without at least one problematic aspect. The three judge Federal Circuit appellate panel that decided the case split 2-1, with the dissenting judge arguing that the claims merely captured an earlier concept and performed it on a general computer. Dissenting Judge Mayer compared website-within-a-website technology to, of all things, branded brick and mortar vendors housed within big box stores. That Judge Mayer, a patent serial killer, could blithely compare a brick and mortar construction with website programming, shows some questionable rationale that is hopefully limited to just him.

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IP Law for Startups: A Primer Presentation

An Article in Schott, P.C.’s IP Law For Start-ups Series
By Stephen B. Schott

I gave this short presentation at the University of Pennsylvania’s Wharton School this past week. The idea was to introduce the students to the IP issues they may see at the beginning of their startup cycle, and only briefly touch upon the IP issues they might see at the end.

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