Category Archives: Patents

What does the USPTO’s 2014 Interim Guidance on Patent Subject Matter Eligibility mean for software inventions?

At the end of a year in which the patent eligibility of software inventions came under fire like never before, the USPTO finally issued its long-awaited 2014 Interim Guidance for Subject Matter Eligibility, which describes how patent examiners should assess whether a patent application includes patent-eligible subject matter. While the new Interim Guidance may not satisfy many inventors who wish to patent their software, it can help inventors identify the types of inventions that have a chance of success, as well as those for which a patent application may be an exercise in futility.

The new Interim Guidance was prompted in part by several U.S. Supreme Court decisions, including the Court’s June 2014 decision in Alice v. CLS Bank. In  Alice, the Court established a two-part test for patent eligibility. Under the Alice test, one must first “determine whether the claims at issue are directed to a patent-ineligible concept.” Then, one must determine whether there are sufficient limitations present in the claim “to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.” Since Alicecourts have overturned a significant number of patents covering software and business methods as lacking patent-eligible subject matter.

When it comes to software, the Interim Guidance provides direction almost exclusively by example, listing cases in which various courts have overturned or upheld patents relating to software.  However, some general themes are apparent throughout the document: Continue reading

Kimble v. Marvel Enterprises: a patent licensing case to watch in 2015

Expired2015 could prove to be a time of change for patent licensing law, as the Supreme Court recently agreed to review the long-standing rule that a patent holder may only receive royalties during the term of a patent, and not after it expires.

In the case that is the subject of the appeal, Kimble v. Marvel Enterprises, Inc., the inventors of a toy with Spider-Man-like web-shooting capabilities sold a patent covering the toy to Marvel Enterprises. The agreement imposed Continue reading

How long does patent and trademark prosecution take? (2014 edition)

At the end of each fiscal year, the USPTO releases a Performance and Accountability Report, which is loaded with data about patent and trademark allowance rates, average pendency, and other details. The USPTO recently released its Performance and Accountability Report for Fiscal Year  2014. This means that it’s time for IP Spotlight’s annual review of the question:  “how long does it take to receive a patent or trademark registration?”

To answer that question, here are a few highlights from the USPTO’s 2014 report:

Patents:  After several years of steep reductions in patent application pendency, the USPTO’s efforts appeared to plateau in fiscal year (FY) 2014. The average time between filing and first office action was 18.4 months, which was slightly above FY 2013’s average of 18.2 months. The USPTO fared better in reducing average total pendency from 29.1 months in FY 2013 to 27.4 months in FY 2014, but this was still short of the USPTO’s goal of 26.7 months.

The USPTO acknowledged that it faces challenges in continuing to reduce pendency. The challenges include the redirection of resources to other initiatives, such as and initiative to reduce the backlog of unexamined Requests for Continued Examination (RCEs), and the development of guidance relating to the changing law relating to patent-eligibility. The USPTO also received more patent applications and granted more patents in FY 2014 than in any previous year.

The pendency rates vary depending on the technology covered by the patent application. For example:

  • applications relating to biotechnology and organic chemistry (USPTO Technology Center 1600) have an average wait time of 15.0 months to first action, and an average total pendency of 26.2 months;
  • applications relating to chemical and materials engineering (USPTO Technology Center 1700) have an average wait time of 19.5 months to first action, and an average total pendency of 28.8 months;
  • applications relating to networking, multiplexing, cable and security (USPTO Technology Center 2400) generally wait 18.6 months to first action, and have an average total pendency of 30.8 months;
  • applications relating to communications technologies (USPTO Technology Center 2600) have an average wait time of 17.8 months to first action, and an average total pendency of 28.7 months; and
  • applications relating to mechanical engineering products (USPTO Technology Center 3700) have an average wait time of 21.3 months to first action, and an average total pendency of 31.1 months.

The total average pendency is highest for applications involving computer architecture, software & information security (USPTO Technology Center 2100), where total pendency averages 31.7 months.

The overall patent allowance rate was 54.4% in FY 2014– a slight decrease from FY 2013’s 55.2%.

Other interesting statistics include:

  • The number of appeals filed against final rejections declined by over 10% in FY 2014.
  • The USPTO’s efforts to reduce the backlog of RCEs appear to be paying off. The number of unexamined RCEs dropped by over 40% in the past year.

Trademarks:  In FY 2014 the average time from filing to first Office Action in a trademark application was 3.0 months, and the average total pendency was 9.8 months.  These numbers are similar to the statistics for the past three years, and better than the USPTO’s goals of 3.5 months to first action and 12.0 months of overall pendency.

Patent-eligibility after Alice: a summary of decisions that found software inventions eligible for patenting

Since the June 2014 U.S. Supreme Court decision in Alice Corporation Pty Ltd. v. CLS Bank Int’l, at least 16 district court decisions, at least three Federal Circuit decisions, and a number of Patent Trial and Appeals Board (PTAB) decisions have overturned software and business method patents under the new patent-eligibility standard of Alice.

While many of the cases explained why the specific claims failed to satisfy patent-eligibility requirements, for the most part the cases provided little guidance to help the patent community identify what types of claims would be patent-eligible. The USPTO has promised to issue a guidance memo on this topic, but reports of the publication date of the memo have repeatedly moved that date forward.  Originally predicted to be published in August 2014, at the time of this writing the latest predicted publication date was December 2014.  [UPDATE:  The USPTO published a new Interim Guidance on December 16, 2014]

In the interim, patent applicants can find some guidance in the handful of court and PTAB decisions that refused to overturn patent claims.  A summary of several of those cases, with links to the cases and patents, follows: Continue reading

Court finds that ambiguous assignment agreement does not break chain of title

It’s always important to ensure that intellectual property agreements are carefully drafted.  However, on rare occasions a court will see past a drafting error and interpret an agreement to match the apparent intent of the parties, even if certain language of the agreement may conflict with that interpretation.

This happened in a recent case from the Southern District of Indiana. In a consolidated order involving suits that GS CleanTech Corporation (CleanTech) brought against various defendants in that court, the defendants filed motions for summary judgment and asserted that CleanTech lacked standing to bring the suit because CleanTech had not established title to the asserted patents.

CleanTech acquired the patents from GS Ethanol Techs. Inc. (GSET) and other entities by an assignment agreement dated May 15, 2009. The defendants asserted that the chain of title in the patents was broken by a January 2008 Security Agreement in which GSET and the other owners conditionally assigned the patents to YA Global Investments, L.P. (YA Global).

The defendants argued that although the document was titled “Security Agreement,” it was actually an assignment because of the grant clause conveyed “a continuing interest in the patents” to YA Global. The wording of the grant clause was immediate, the agreement was recorded against the patents, and so the defendants argued that the Security Agreement passed ownership of the patents to YA Global.

The court disagreed, stating that the remainder of the Agreement made it clear that the intent of the document was to grant “a continuing security interest in the patents” rather than actual title, even if the grant clause didn’t include that specific word.

Federal Circuit reverses course in Ultramercial v. Hulu; finds method of delivering advertisements to be an abstract idea

Yes or NoA method of providing advertising in connection with streaming media is not eligible for patenting, according to the latest decision of the Federal Circuit in the long-running Ultramercial v. Hulu patent saga.

Ultramercial’s patent claimed a method of distributing media over the Internet.  Claim 1 included eleven steps.  The steps described a process of associating ads with streaming media, allowing a consumer to access the media for free if the consumer first views the ad, and receiving payment from the advertiser after the consumer views the ad.

When the Federal Circuit first considered the claims in 2013, it found the claims to be patent-eligible. At the time, the court stated that ” it wrenches meaning from the word to label the claimed invention ‘abstract.'”  The court’s 2013 decision also stated that “the claim appears far from over generalized, with
eleven separate and specific steps with many limitations and sub-steps in each category.”

Fast forward to 2014, after the United States Supreme Court issued its decision in Alice v. CLS Bank.  The Alice decision established a two-part test for determining patent-eligibility: (1) Is the claim directed to an abstract idea? (2) If so, are there other elements in the claim sufficient to ensure that the claim amounts to significantly more than the abstract idea itself?

When faced with a new post-Alice appeal in the case, the Federal Circuit applied the new two-part test of Alice.  This time, the court reached a different conclusion Continue reading

Federal Circuit: Private entities do not infringe patent when performing “quasi-governmental actions”

31220041_sPrivate entities cannot be liable for patent infringement when performing “quasi-governmental actions” with the express or implied consent of the U.S. government, according to a recent decision of the U.S. Court of Appeals in Iris Corporation v. Japan Airlines Corporation (Fed. Cir. 2014).

Iris Corporation’s patent number 6,111,506 covered a method of making an identification document (such as a passport) with a contactless communication unit.  The case arose after Iris accused Japan Airlines Corporation (JAL)  of infringing Iris’ patent by scanning the electronic passports of its U.S. passengers.  Iris argued that by using and scanning passports that contain RFID chips, JAL infringed the patent.

At least two U.S. statutes required JAL to perform the scanning. Because of this, in its defense JAL argued that it could not be liable for infringement because its actions were required by federal law.  JAL also noted that 28 U.S.C. §1498(a)) states (with emphasis added):

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States.

The court agreed with JAL’s argument.  The court noted that an activity is “for the United States” if two requirements are met: (1) it is conducted “for the Government,” and (2) it is conducted “with the authorization or consent of the Government.”

The court found the first requirement to be satisfied because the scanning of passports was a “quasi-governmental activity” done for the benefit of the U.S. government.  The second requirement was satisfied because “JAL cannot comply with its legal obligations without engaging in the allegedly infringing activities.”

Because of this, the court dismissed the case and held that IRIS’s exclusive remedy is to file suit against the U.S. government, not any private entity.

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