IP Spotlight

Bill Bennett of Australian law firm Pizzeys recently posted an article about a new Australian Patent Office decision governing the patentability of business methods in Australia. 

As Mr. Bennett states in the article, prior to the new decision:

the governing precedent was Grant v Commissioner of Patents [2006].  Grant stood for the proposition that a method must produce “a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation.” 

In the new case, the Australian Patent Office:

has qualified the “physical effect” requirement by now making it clear that the physical effect must be “central to the purpose or operation of the claimed process or otherwise arises…in a substantial way”.

For the full text of the article and more information, visit the Pizzeys Australian Patent Law Blog by clicking here.

In its recent Bilski v. Kappos decision, the U.S. Supreme Court held that business methods are patentable, and the Court refused to accept the Federal Circuit’s “machine or transformation” test as the sole test for determining whether a process is patent-eligible.  In a quiet counterpart to this decision, on the same day the Court also remanded two cases involving medical methods – Prometheus Laboratories, Inc. v. Mayo Collaborative Services and Classen Immunotherapies, Inc. v. Biogen Idec – to the Federal Circuit to reconsider the cases in light of the Bilski decision. 

In Prometheus Laboratories, the Federal Circuit originally found (more…)

On June 28, 2010, the U.S. Supreme Court issued its long-awaited decision in Bilski v. Kappos.  The patent application at issue involved a method of hedging against risk of price changes in energy market commodities.  The lower court held that the invention was not patentable subject matter because it was a pure business method — not tied to a particular machine or apparatus, and not transformative of a particular article into a different state or thing.

The Supreme Court held that the so-called “machine or transformation” test  is useful, but not a strict requirement for patentability.  While holding that “attempts to patent abstract ideas” — and in particular the claims that Bilski sought — were not patentable, the Court’s opinion also said that business methods are not per se unpatentable subject matter.   However, the Court offered no guidance as to what specific types of business methods may or may not be patentable.  In fact, the Court’s opinion notes that the Federal Circuit may develop additional limiting tests.  In addition, several members of Congress have spoken out about adding limitations through amendments to the Patent Act — despite the slow movement associated with previous attempts to reform the Patent Act.

In a quickly-issued memorandum to its patent examiners regarding the Bilski decision, the USPTO signaled that Bilski is unlikely to change the way that it reviews business method patent applications.  The memorandum notes that methods that meet the machine-or-transformation test are likely patent-eligible.  However, the memo also notes that:

If a claimed method does not meet the machine-or-transformation test, the examiner should reject the claim under section 101 unless there is a clear indication that the method is not directed to an abstract idea.

My colleagues Russ Barron, Mike Renaud, and Courtney Quish have published a more detailed analysis of the Bilski decision, available here.  In the meantime, the Court’s opinion may encourage software developers and business process inventors to continue seeking patent protection for their inventions.

On June 24, 2010, the U.S. Patent and Trademark Office announced that it will expand its Patent Application Backlog Reduction Stimulus Plan to all applicants.  Under the plan, applicants with more than one copending patent application may have one of the applications accorded “special status” if the applicant agrees to abandon another pending application.  “Special status” means that the applicant is advanced for faster examination — typically receiving action within one year.

The previous version of the backlog stimulus plan was limited to small entity applicants, and it was scheduled to end June 30, 2010.  The new version of the plan is not limited to small entities.  Instead, it will be limited to the first 10,000 applicants of any size, and it will last through at least December 31, 2010.

On June 3, 2010, the U.S. Patent and Trademark Office announced a proposal to revise the patent examination process in a potentially significant manner.  Under the new proposal, patent applicants can choose one of three “tracks” for patent examination:

• Track I (prioritized examination):  Applicants who pay an additional fee will receive a first office action within four months.  Final disposal (allowance or final rejection) will occur within twelve months.
• Track II (standard examination):  This option will involve standard fees and will proceed under current procedures.
• Track III (deferred examination):  Non-continuing applications that originate in the U.S. may have examination deferred for up to 30 months.  The examination fee — and possibly also the search fee — also may be deferred during this period.

In a telephone conference, USPTO Chief Communications Officer Peter Pappas explained that (more…)

On May 21, 2010, the U.S. Patent and Trademark Office announced that it would open up its Green Technology Pilot Program to patent applications that cover additional technology categories.  Under the Pilot Program, an applicant who has filed a patent application covering technology that enhances environmental quality may apply for special handling status.  When the special status is granted, the USPTO will advance the application out of turn so that it is reviewed more quickly.

The original guidelines for the Pilot Program, published in December 2009, limited the program’s benefits to patent applications filed before December 8, 2009 in certain categories, including:

• alternative energy production;
• energy conservation;
• environmentally friendly farming; and
• environmental purification, protection, or remediation.

So far, the program has had limited impact.  In the first five months of the program, the USPTO awarded special status to only 342 patent applications.  This may be because the program’s original technology classification requirement only covered technologies for which the wait time is generally not very long at the USPTO.  Thus, applications that achieved special status often received little actual benefit.  In addition, the program only covered already-filed applications.  It did not cover (and thus did nothing to encourage) new patent applications for “green” technologies.

Under the newly announced expansion of the program, the USPTO has eliminated any technology classification requirements.  Rather than limiting the program to specific technology areas, the program now simply requires the applicant to explain how the invention materially enhances the quality of the environment by contributing to the restoration or maintenance of life-sustaining elements.  The program is still limited to applications filed before December 8, 2009 — and thus it does not cover newly filed patent applications.  However, elimination of the technology classification requirement may encourage more applicants to participate in the Pilot Program, and thus spur extension of the program past its original pilot period.

The Pilot Program lasts through December 8, 2010 and is limited to the first 3,000 applicants.  More details are available on the USPTO website.

This week the Federal Circuit issued a non-precedential opinion that provides some insight into what the court considers to be “common sense” in the context of patent application examination.  In In re Vaidyanathan (no. 2009-1404, issued May 19, 2010), the Court explained when rejecting a claim as obvious, USPTO examiners and the Board of Patent Appeals and Interferences cannot simply assert that a combination is “common sense” in a conclusory manner.  The Court also chided the USPTO for a record that provided several different interpretations of a single prior art reference.

In the case, the patent claims related to (more…)

USPTO regulations (37 C.F.R. 1.56) state that any individual who is substantively involved in the preparation and prosecution of a patent application owes a duty of candor to the USPTO.  According to the regulation, this requirement “includes a duty to disclose to the Office all information known to that individual to be material to patentability.”  Failure to comply with this requirement can render a patent unenforceable.

In the recent case of Avid Identification Systems, Inc. v. Crystal Import Corp., the Federal Circuit held that this duty can extend to a person — such as a corporate officer — who is neither an inventor nor a prosecuting patent attorney.  In the case, Avid’s president demonstrated a new invention at a trade show.  More than one year later, the company applied for a patent on the invention.  The president was not the inventor, he did not prepare the patent application, and he did not direct the attorneys who did prepare the application.  Nonetheless, the Court found that he was “substantively involved” in the prosecution, stating:

We read “substantively involved” to mean that the involvement relates to the content of the application or decisions related thereto, and that the involvement is not wholly administrative or secretarial in nature. 

Factors relevant to the court’s decision included that (i) the president specifically hired the inventors to develop the invention, (ii) the president was involved in “all aspects” of the company’s operation, implying that he would have been involved in the patent prosecution, and (iii) the president was included on communcations involving a related European patent application, thus further implying that he would have been involved in prosecution of the U.S. patent. 

Because Avid’s president did not disclose the trade show demonstration to the USPTO, the court held the patent to be unenforceable.

The Federal Circuit’s decision serves as a reminder that all individuals involved in patent prosecution matters should consider the duty of disclosure, and that they should provide their patent attorneys or agents with all material information for disclosure to the USPTO.

This week USPTO Director David Kappos’ blog included a post discussing the Federal Circuit’s recent decision in Ariad Pharmaceuticals v. Eli Lilly.  In the case, the Federal Circuit held that Section 112 of the Patent Act has a written description requirement that is separate and apart from the enablement requirement.  Director Kappos’ post notes that in all applications reviewed from 2005-2010, the USPTO issued Section 112 rejections for the application’s asserted failure to contain an adequate written description. 

In what may be a signal that the USPTO intends to apply Section 112 more aggressively to software claims, the post also states:

[T]he written description doctrine is particularly useful in examining claims that employ functional language, or that merely set forth a desired result without any indication of what achieves that result. . . .  Thus, when confronted with functional claims, as with results obtained claims, I encourage examiners to carefully consider whether such claims — amended or original — are adequately supported by the specification.

Patent claims relating to software often use functional language, as the function of the software is typically what separates it from the prior art.  For the patent practitioners reading this post — are you seeing an increased use of Section 112 rejections for software claims?   I’m interested in reader comments on this subject.