Category Archives: Patents

Federal Circuit starts 2018 with two favorable decisions for software patents

After issuing two very negative decisions that called the future of software patent-eligbility into question, in January 2018 the Federal Circuit moved its software patent-eligibility pendulum back in the direction of finding eligible subject matter in software patents.

In Core Wireless Licensing S.A.R.L.. v. LG Electronics, Inc. (Jan. 25, 2018), the court affirmed a district court decision that denied a request for summary judgment that the claims of patents 8,713,476 and 8,434,020 were directed to ineligible subject matter.

The patents disclosed and claimed “improved display interfaces, particularly for electronic devices with small screens like mobile telephones…. The improved interfaces allow a user to more quickly access desired data stored in, and functions of applications included in, the electronic devices.”

Claim 1 of the ‘476 patent recited (with emphases added by the court):

1.  A computing device comprising a display screen, the computing device being configured to display on the screen a menu listing one or more applications, and additionally being configured to display on the screen an application summary that can be reached directly from the menu, wherein the application summary displays a limited list of data offered within the one or more applications, each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application, and wherein the application summary is displayed while the one or more applications are in an un-launched state.

Claim 1 of the ‘020 patent recited (with emphases added by the court): Continue reading

Cybersecurity Patent Strategies vs. the Growing Barriers to Software Patents

More and more companies who offer blockchain and other next generation cybersecurity technologies are seeking patents to help protect their competitive position. The U.S. Patent and Trademark Office’s (USPTO’s) Technology Center 2400, which covers networking, multiplexing, cable and security technologies, includes over 200 Patent Examiners who focus on security technologies. TC 2400 issued over 33,000 patents in 2017. During this period, the USPTO’s overall allowance rate was 59.4%.

Despite this apparent boom, patent applications covering cybersecurity technologies have faced increasing scrutiny since the June 2014 U.S. Supreme Court decision in Alice Corporation Pty Ltd. v. CLS Bank Int’l. In Alice, the Court found that a software implementation of an escrow arrangement was not eligible for patenting in the U.S. because it merely involved implementing an “abstract idea” on a computer. The Court did not define the term “abstract idea” other than to describe it as a building block of human ingenuity, or a fundamental concept, including concepts that involve a “fundamental economic practice.”

Since then, the USPTO has issued several guidance documents, and lower courts have issued several opinions, describing when software is and (more often) is not eligible for patenting under Section 101 of the Patent Act. The USPTO typically denies, and courts often strike down, patent applications and patents covering methods of manipulating data, completing financial transactions, and algorithms that do not require any particular hardware other than a general-purpose computer.

Patent applications that focus on financial applications of blockchain technologies often face patent-eligibility hurdles. A search of the USPTO’s Patent Application Information Retrieval (PIR) system indicated that as of January 2018, over 90% of the published applications and issued patents having the term “blockchain” and any combination of “cryptocurrency,” “coin,” or “currency” in the claims were assigned to the USPTO’s Technology Center 3600. (TC 3600 includes the USPTO’s business methods examining unit.) Over 80% of these patents and patents applications received a Section 101 rejection on first action. In addition, the allowance rate in TC 3600 remains far below that of the USPTO’s overall statistics.

Claim Drafting Strategies Continue reading

Defensive Patent Strategies for Blockchain and Distributed Ledger Technologies

Many companies who offer next generation cybersecurity technologies are experiencing significant growth in both corporate share value and revenue. To help protect against competition, many companies are seeking patents to cover their blockchain and other distributed ledger technologies, security awareness training systems, and innovative real-time data analytics methods.

As of January 2018, United States Patent and Trademark Office (USPTO) records revealed just over fifty granted patents in which the phrase “blockchain” or “distributed ledger” appeared. Twenty-five of these patents included those terms in the title, abstract or claims. Some of the patents were awarded to cryptocurrency startups that launched or are about to launch initial currency offerings (ICOs). Others were awarded to U.S. software and business services industry titans who already have large patent portfolios. Approximately one-third of those patents were awarded to businesses that appear – at least for now – to be non-practicing entities, which could signal a risk of patent litigation on the near horizon.

A strategically developed patent portfolio can have several benefits. In addition to increasing corporate value and providing a weapon against infringement, patents can serve as a defensive mechanism against high-stakes patent litigation. A competitor who holds patents may hesitate before filing a patent infringement suit against a company that owns a strong patent portfolio that it can assert in a counterclaim. Strong patent portfolios also can provide companies with the opportunity for favorable cross-licensing arrangements, with fewer royalties being paid and potentially more royalties coming in.

Patent applicants must consider how to draft effective patent applications. Tips for doing this include:

  • Distributed ledger technologies typically require actions by multiple entities. However, it can be difficult to establish infringement of a patent claim unless all elements of the claim are used or performed by a single entity. Patent applications should draft claims with a single infringer in mind, rather than to a distributed system.
  • The U.S. and many other countries around the world take a negative view of software patents that cover mere “abstract ideas” rather than innovations in technology. A new business application of an existing blockchain technology is unlikely to be patentable. Instead, patent applications should cover innovations that provide a technical solution to a technical problem.

Patent strategies for distributed ledger technologies also need to consider the tension between the limited monopoly that a patent provides and the open source platform that a distributed ledger necessarily requires.

For the last few years, several companies have openly discussed and favored the idea of a blockchain “patent pool” in which stakeholders share access to each others’ blockchain-related patents. The Blockchain Patent Sharing Alliance (BPSA) is one such entity that is trying to gather a critical mass of stakeholders and companies. In addition, in 2016, the Linux Foundation formed the Hyperledger Project, which seeks to create an open-source framework for distributed ledger technologies.

Some stakeholders are taking matters into their own hands. In 2016 blockchain developer Blockstream publicly pledged that it will never use its blockchain patents as a weapon. Instead, Blockstream pledged that all of its blockchain software patents are available under the terms of a defensive patent license. Under that license, Blockstream will only use its patents for “defensive purposes” against a party who brings or threatens a patent infringement claim against Blockstream or against a user of Blockstream’s technologies.

Third in a four-part series. For other posts in this four-part series, see:
Intellectual Property Strategies For Next Generation Cybersecurity Technologies
Trends in Patenting Blockchain Technologies
Cybersecurity Patent Strategies vs. the Growing Barriers to Software Patents 

Trends in Patenting Blockchain Technologies

With the recent rise in values of cybercurrencies such as bitcoin, and with increasing interest in initial currency offerings (ICOs), businesses around the world are rushing to build value with new blockchain technologies and applications.

This presents many opportunities to patent innovative blockchain and other distributed ledger technologies. This is a relatively recent trend. The first recorded appearance of the word “blockchain” in any U.S. patent or published patent application was in 2012, approximately three years after the launch of bitcoin.

As of January 2018, United States Patent and Trademark Office (USPTO) records revealed:

  • 25 granted patents with the term “blockchain” or “distributed ledger” in their title, abstract or claims; and
  • at least 275 published patent applications include one or both of those terms in the title, abstract or claims.

When the data set is expanded to patents and applications that include the word “blockchain” anywhere in the text, the list grows to 56 granted patents and over 500 published applications. These include:

Patent Number Title Grant Date Assignee
US9862222 Digitally encoded seal for document verification 2018-01-09 UIPCO LLC
US9853819 Blockchain-supported, node ID-augmented digital record signature method 2017-12-26 Guardtime IP Holdings LTD.
US9836908 System and method for securely receiving and counting votes in an election 2017-12-05 Blockchain Technologies Corporation
US9824031 Efficient clearinghouse transactions with trusted and un-trusted entities 2017-11-21 International Business Machines Corporation
US9807106 Mitigating blockchain attack 2017-10-31 British Telecommunications PLC
US9785369 Multiple-link blockchain 2017-10-10 Accenture Global Solutions Limited; GSC Secrypt LLC
US9794074 Systems and methods for storing and sharing transactional data using distributed computing systems 2017-10-17 Nasdaq Technology AB
US9747586 System and method for issuance of electronic currency substantiated by a reserve of assets 2017-08-29 CPN Gold B.V.
US9749140 Systems and methods for managing digital identities 2017-08-29 Cambridge Blockchain LLC
US9722790 Identity management service using a blockchain providing certifying transactions between devices 2017-08-01 Shocard, Inc.
US9641338 Method and apparatus for providing a universal deterministically reproducible cryptographic key-pair representation for all SKUs, shipping cartons, and items 2017-05-02 SkuChain, Inc.
US9338148 Secure distributed information and password management 2016-05-10 Verizon Patent and Licensing Inc.; Cellco Partnership

Most of the granted patents cover new or improved aspects of the blockchain itself. Only a small number of U.S. patents have issued to date for new applications of existing blockchain technologies. This is likely because many companies are merely using existing blockchain technologies to implement different types of transactions.

Over half of the granted patents were examined within the USPTO’s Technology Center 2400, which covers networking, multiplexing, cable and security technologies. TC 2400 includes over 200 examiners who focus on security technologies.

In each of the past three years USPTO Examiners from TC 2400 have participated in a Cybersecurity Partnership meeting, in which the USPTO has interacted with stakeholders in the cybersecurity and network security sector to share ideas, experiences, and insights. Information that the USPTO shared in these meetings includes:

  • The top 15 filers of patent applications for information security and cryptography technologies in each year during 2014-2016 included Amazon, Google, IBM, Intel, Microsoft, Qualcomm, Samsung, Symantec, and Tencent. Top filers in 2015 and 2016 also included Bank of America, Cisco, and EMC.
  • While the vast majority of U.S. patent applications for information security and cryptography technologies have been filed by U.S. companies, the USPTO has also received a significant number of filings from companies that are based in Japan, China, Korea, Germany, France and Israel, among other countries.
  • The average pendency (time between filing and either grant or abandonment) of patent applications for information security and cryptography technologies was approximately 27 months in 2016.

Globally, as of January 2018 World Intellectual Property Office (WIPO) records show 197 published Patent Cooperation (PCT) applications with the term “blockchain” or “distributed ledger” in their title, abstract or claims. However, relatively few of these PCT applications have reached the national stage. The European Patent Office database includes only 21 such patents and published applications. According to a recent report from Clarivate Analytics, in 2016 China experienced significant growth in new patent filings for blockchain technologies and is second only to the U.S. for new filings involving blockchain technologies.

This post is the second in a four-part series. For other posts in this series, see:
Intellectual Property Strategies For Next Generation Cybersecurity Technologies
Defensive Patent Strategies For Blockchain and Distributed Ledger Technologies
Cybersecurity Patent Strategies vs. the Growing Barriers to Software Patents 

Intellectual Property Strategies for Next Generation Cybersecurity Technologies

Cybersecurity technology has become one of the most important industries in the world today. With products that are critical to businesses in countless fields, including finance, healthcare, transportation, public utilities, manufacturing, defense and government, experts have predicted that the global market for cybersecurity technologies will grow by 10% per year through 2020.

Cybersecurity technologies are also one of the biggest drivers in corporate value today. 129-year-old Eastman Kodak Company recently saw the value of its stock jump by 200% after announcing a new service that will use blockchain technologies to help photographers get paid in a new cryptocurrency when others use their photos. A New York-based beverage distributor experienced a 289% share price increase after it simply renamed itself from “Long Island Iced Tea Company” to “Long Blockchain Corp.” and announced that it would start to offer blockchain technology solutions.

Next generation cybersecurity technologies include more than just blockchain-based payment systems. Distributed ledger technologies have applications in multiple fields, including document sharing, video and audio streaming, and biomedical applications. And although blockchain is all the rage at the moment, other cybersecurity technologies such as network attack simulations, network security awareness training through methods such as simulated phishing, and real-time analytics are equally important, if not more so.

With this background in mind, what intellectual property protection options are available for next generation cybersecurity technologies? Continue reading

How long does it take to get a patent or trademark registration? (2017 update)

At the end of each fiscal year, the USPTO releases a Performance and Accountability Report, with statistics about patent and trademark allowance rates, average pendency, and other details. The USPTO recently released its Performance and Accountability Report for Fiscal Year 2017. 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 register a trademark?”

To answer that question, here are a few highlights from the USPTO’s FY 2017 report:

Patents:  The USPTO continued a six-year trend of reducing overall patent application pendency in FY 2017. The average time between filing and first office action was 16.3 months, which is about the same as last year. However, average total pendency decreased to 24.2 months (down from last year’s 24.2-month average pendency, and down from a high of 33.7 months in 2012).

The report did not discuss the effect of the USPTO’s “Track 1” expedited examination option on the overall timeline. Applicants who pay the additional fee for Track 1 processing typically receive a first action within 4-6 months of filing, and allowance or final action within 12 months of filing.

The wait times vary depending on the technology involved. Patent applications for computer architecture and mechanical engineering inventions generally experienced the longest waits, while applications in the biotech and organic chemistry fields moved relatively quickly. The breakdown by technology included: Continue reading

Why do patents often include method claims and apparatus claims?

When I send a draft patent application to an inventor who is new to the patent process, the inventor often asks why the claims seem to repeat themselves. A patent application often has one group of claims directed to a method, and another group directed to an apparatus or system. This can confuse new inventors because the two claim groups often appear to be very similar.

Why the duplication?  There are several reasons.

One reason is that method and apparatus claims can be directed to two separate groups of infringers. A patent gives its holder the exclusive right to make, use and sell the invention. Method and apparatus claims may each define the invention in a slightly different way. Some entities — such as a distributor or retailer — may sell an apparatus, but they will never practice a method of making or using the apparatus. Other entities (such as end users) may use the invention but not make or sell it. Depending on the situation, one set of the claims or the other could be more useful to assert against a particular infringer.

Another reason to include two groups of claims relates to the point in time at which damages start to accrue for infringing activity. Section 287 of the Patent Act limits recovery of damages for making/using/selling a patented article to the point in time where the infringer had actual notice of the patent, or constructive notice of the patent through marking. Because Section 287 refers to “articles” but not methods, courts have generally limited the notice requirement to apparatus claims, not system claims.

This interpretation by the courts dates back to at least 1936, when in Wine Railway Appliance Company v. Enterprise Railway Equipment Company, the Supreme Court said that Section 287 does not limit damages if the patent holder isn’t actually making articles to mark.

More recently, courts have clarified that if a patent is directed only to a method (i.e., there are no apparatus/article claims), Section 287 does not apply and notice is not required. (See Bandag, Inc. v. Gerrard Tire Co.) If a patent includes both apparatus and method claims, then Section 287 does not apply if only the method are asserted. (See, for example:  American Medical System Inc. v. Medical Engineering Corp., Crown Packaging Technology Inc. v. Rexam Beverage Can Co. and Hanson v. Alpine Valley Ski Area, Inc.) Whether or how Section 287 would apply if both types of claims are asserted has not yet been fully addressed by the Federal Circuit. (See Rembrandt Wirless Technologies, LP v. Samsung Electronics Co., Ltd.)

Because of this method/apparatus dichotomy, as well as the fact that Section 287’s notice requirement does not apply to an entity that holds — but does not practice – the patent, the notice requirement has been criticized as primarily benefitting non-practicing entities. However, so far Congress has not considered this issue to be worthy of an amendment to the Patent Act.

In addition, to avoid issues associated with the notice requirement some patent applicants may consider filing patent applications with only method claims or only apparatus claims. This may mean filing two applications on the same day, or filing a second application that claims priority to a first application. This adds to the expense, but it can help reduce the worry that insufficient marking will limit damages when asserting both method and apparatus claims.