IP3: Industry Patent Purchase Program allows patent owners to offer patents to leading global companies

A new website will give patent holders a limited-time opportunity to offer their patents for sale to some of the world’s largest companies.  According to a press release from Allied Security Trust (AST):

IP3 creates a patent marketplace that brings together a pool of significant money from [participating] companies … to purchase patents in a format that allows sellers to set their own price for their patent assets and reduces the time and complexity usually associated with patent transactions.  IP3 builds on the success of Google’s innovative 2015 Patent Purchase Promotion (PPP), and seeks to attract the submission of high quality patents from patent owners across a wide array of industries during a limited time period.

Participating companies include Google, Facebook, IBM, Microsoft, Adobe, SAP, Ford, Honda , Hyundai, Kia Motors, Verizon,  Cisco, Arris, leading cable service providers, and others. Technologies that the group is particularly interested in include enterprise software, communications, networking, semiconductors, content delivery and cloud computing.

The IP3 portal (ip3ast.com) will be open from May 25, 2016 to June 8, 2016. AST expects that all transactions will be completed by the end of September 2016.

Examiner Ninja website offers free insight into USPTO Patent Examiner data

A new website offers a useful — and free — tool to help patent applicants and their attorneys make data-driven decisions about patent prosecution strategy. The Examiner Ninja website publishes allowance rates, interview effectiveness data, and appeal records for USPTO Patent Examiners in a searchable form. This data can be very useful for applicants and their attorneys who are trying to decide whether an interview, amendment, or appeal may be the best open when responding to a particular Examiner’s rejection.

The data for individual Examiners currently spans an Examiner’s entire USPTO career, while art unit and overall statistics cover the last 15 years. The website plans to roll out additional search and filtering capabilities in the near future.

The website is offered by Justin Roettger, a web developer and attorney in California who gathers the information from several public websites and makes it available in an easy-to-use format.


Federal Circuit finds two patents directed to specific database structures eligible for patenting, not abstract ideas

A new Federal Circuit decision gives software patent applicants some insight into when software can be patent-eligible. In Enfish LLC v. Microsoft Corporation (Fed. Cir. May 12, 2016), the court reversed a district court’s ineligibility determination for two patents directed to database structures.  In the decision, the Federal Circuit stated: “We do not read [the Supreme Court decision in] Alice [Corporation Pty Ltd. v. CLS Bank Int’l] to broadly hold that all improvements in computer-related technology are inherently abstract…. Nor do we think that claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis.”

With this in mind, the Federal Circuit directed that “the first step in the Alice inquiry in this case asks whether the focus of the claims is on the specific asserted improvement in computer capabilities ([such as a] self-referential table for a computer database) or, instead, on a process that qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool.”

The patents at issue were US patents 6,151,604 and 6,163,775.  A representative claim (claim 17 of the ‘604 patent) contained the following limitations:

17. A data storage and retrieval system for a computer memory, comprising:
means for configuring said memory according to a logical table, said logical table including:
a plurality of logical rows, each said logical row including an object identification number (OID) to identify each said logical row, each said logical row corresponding to a record of information;
a plurality of logical columns intersecting said plurality of logical rows to define a plurality of logical cells, each said logical column including an OID to identify each said logical column; and
means for indexing data stored in said table.

Because the claim involved a specific structure of a logical table in a database, and were “not simply directed to any form of storing tabular data, but instead are directed to a self-referential table for a computer database,” the court found that the claims were directed to an improvement in the functioning of a computer.

[A summary of all of post-Alice Federal Circuit, U.S. District Court, and Patent Trial and Appeals Board decisions that found computer-related patent claims to be patent-eligible is available at this post on IP Spotlight.]

Supreme Court to address two intellectual property issues in fall 2016

The U.S. Supreme Court recently agreed to review two cases that involve important IP questions in the Court’s fall 2016 session. One case will consider whether to modify or do away with the long-standing defense of laches in patent infringement cases. The other case will address the extent to which apparel can be protected by copyright.

The doctrine of laches is a defense to patent infringement that protects accused infringers if (1) the patent holder unreasonably delayed in filing the infringement lawsuit, and (2) the accused infringer was materially prejudiced by the delay. If a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer’s activity, laches may be presumed. In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, et al. (Fed. Cir. Sept. 18, 2015), the accused infringer argued that a 2014 Supreme Court decision that abolished laches as a defense in copyright cases should also apply to patent cases. The Federal Circuit disagreed and held that the defense of laches is still available in patent infringement cases. The Supreme Court will now resolve this dispute and determine whether the reasoning of its previous decision under copyright law equally applies to patents.

In the second case, the Court will address the extent to which copyright law covers apparel designs. In Varsity Brands Inc. v. Star Athletica, LLC (Sixth Cir. 2015), the U.S. Court of Appeals for the Sixth Circuit ruled that several copyright registrations on cheerleader uniform designs were valid. The designs included various stripes and chevrons, and the Sixth Circuit rejected an argument that those designs were functional and found that the designs were “’pictorial, graphic, or sculptural works’ and not uncopyrightable ‘useful articles.’” The Supreme Court will now address the question: “What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?”

However, the Supreme Court also denied petitions in several other IP-related cases. Notably, so far the Court has denied at least seven petitions asking for clarity of the boundaries of patent-eligibility in view of the Court’s previous decisions in Alice Corp. v. CLS Bank Int’l and Mayo Collaborative Services v. Prometheus Laboratories, Inc..  Each of those decisions addressed the scope of Section 101 of the Patent Act, and each decision has resulted in confusion and inconsistency in lower court decisions and USPTO actions that have attempted to apply those decision.


USPTO issues May 2016 Subject Matter Eligibility Update

A new USPTO memo directs Examiners to provide more detail and support when rejecting patent applications under Section 101 of the Patent Act.

A common criticism of the USPTO’s implementation of subject matter eligibility issues is its use of boilerplate analyses when asserting that a patent application merely claims an abstract idea or naturally-occurring phenomenon. The new memo, released on May 4, 2016, directs Examiners to be more specific in their responses, to consider all language of each claim, and to provide legal support for their rejections.  The memo states:  “If the original rejection did not identify a Supreme Court or Federal Circuit decision in which a similar abstract idea was found and applicant challenges identification of the abstract idea, the examiner would need to point to a case in which a similar abstract idea was identified and explain why the abstract idea recited in the claim corresponds to the abstract idea identified in the case to maintain the rejection.”

Guidance relating to abstract idea rejections

When asserting that a patent application claims an abstract idea, the new memo states that Examiners must refer to specific claim language to “identify the judicial exception by referring to what is recited … and explain why it is considered an exception” and “should not go beyond those concepts that are similar to what the courts have identified as abstract ideas.”

The memo also notes that “an additional element…may be enough to qualify as ‘significantly more’ if it meaningfully limits the judicial exception, improves another technology or technical field, improves the functioning of a computer itself, or adds a specific limitation other than what is well-understood, routine, conventional activity in the field or unconventional steps that confine the claim to a particular useful application. In addition, even if an element does not amount to significantly more on its own (e.g., because it is merely a generic computer component performing generic computer functions), it can still amount to significantly more when considered in combination with the other elements of the claim. For example, generic computer components that individually perform merely generic computer functions (e.g., a CPU that performs mathematical calculations or a clock that produces time data) in some instances are able in combination to perform functions that are not generic computer functions and therefore amount to significantly more than an abstract idea (and are thus eligible).”

Guidance relating to law of nature, product of nature and natural phenomena rejections

In the life science area, the new memo states that Examiners must identify the law of nature, product of nature, or natural phenomenon as it is recited “and explain using a reasoned rationale why it is considered a law of nature or natural phenomenon.”

The USPTO also updated its set of life science eligibility examples for Examiners and applicants to consider.

Guidance common to all rejections

If an Examiner finds an abstract idea, law or product of nature or natural phenomenon in the claim, the memo states that the Examiner must consider the claim elements “both individually and as a combination” when determining whether the claim covers more than just the abstract idea.  The guidance notes:  “It is important to remember that a new combination of steps in a process may be patent eligible even though all the steps of the combination were individually well-known and in common use before the combination was made.”

When an Examiner finds that particular claim limitations are well understood, routine, or conventional, “the rejection should explain why the courts have recognized, or those in the relevant field of art would recognize, those claim limitations as being well-understood, routine, conventional activities.”

Notably, the memo states that Examiners should not rely on USPTO examples that do not carry the weight of court precedent. This guidance is also relevant to applicants, since the USPTO’s examples can be useful but do not carry the weight of legal authority.

The memo also warns applicants that an argument that the claim “does not preempt all applications of the exception” will not in itself save the claim. The memo notes that “preemption is not a standalone test for eligibility.”

U.S. Senate passes bill to establish federal trade secrets law

On April 4, 2016, the U.S. Senate unanimously passed a bill that, if enacted, will allow trade secret owners to bring suit in federal court to prevent misappropriation of their trade secrets.

The new bill, S. 1890, is known as the “Defend Trade Secrets Act of 2016,” allows trade secret owners to ask federal courts to order seizure of property necessary to prevent further dissemination of the trade secret. The court may also grant an injunction, award damages for actual loss caused by the misappropriation, and award extra damages and/or attorneys’ fees in extreme cases (such as willful or bad faith misappropriation).

The bill defines “misappropriation” as requiring “improper means,” which includes “theft, bribery, misrepresentation, breach or inducement of breach of a duty to maintain secrecy, or espionage through electronic or other means.” Improper means specifically excludes reverse engineering, independent derivation, and other lawful means.

The bill also provides for protection of the trade secret from disclosure during the federal action, and it also requires protection of the accused infringer against publicity.

The Senate bill would not preempt the many state laws that currently protect trade secrets. Instead, it would provide an additional layer of protection for trade secret owners.

The Senate bill has strong White House support. The House version of the bill has over 120 sponsors, but no timetable has been set yet for its consideration.

UPDATE:  On April 27, the House passed the Senate’s version of the bill. The bill will now move to the President for signature.  On May 11, 2016, President Obama signed the bill into law.

Federal Circuit asked to eliminate supplier-to-inventor transactions from “on-sale” bar to patentability

22702093_sIt is well known that if an inventor sells an invention prior to applying for a patent application, the sale can preclude the inventor from obtaining a patent for the invention. In the United States, the inventor also gets a one-year grace period before the on-sale bar applies. In most other countries, the on-sale bar is absolute with no grace period.

It is not so well-known that the on-sale bar can be triggered by the inventors’ (or patent applicant’s) own purchase of the invention from its suppliers. In 2001, the Federal Circuit considered whether to establish a “supplier exception” to the on-sale bar and decided against such an exception. (Special Devices, Inc. v. OEA, Inc. 270 F.3d 1353, 1357 (Fed. Cir. 2001).)

More recently, in The Medicines Co. v. Hospira, Inc., 791 F.3d 1368, 1370 (Fed. Cir. 2015), the court again refused to grant a supplier exception and noted that the case at hand involved a situation where the supplier was manufacturing a product in preparation for commercial exploitation by the patent holder.

The “no supplier exception” rule may be ripe for change. After the patent holder filed a petition for rehearing, the Federal Circuit vacated its decision in the Medicines Co. case and asked the parties to submit new briefs in the case. Since then, the American Intellectual Property Law Association filed an amicus brief urging the court to rule that a transaction between an inventor and its supplier is not a commercial offer for sale, and therefore should not trigger the on-sale bar to patentability.

The Federal Circuit should issue a new decision in the case during the first half of 2016. The court’s willingness to entertain the rehearing petition suggests that it may be willing to retract, relax, or otherwise change its rule that has stood since the Special Devices case.

[Image credit:  Stuart Miles ]