Tag: Article

Cooperative Patent Classification Implementation and Best Practices

Posted on by Kinney & Lange, P.A.

The Cooperative Patent Classification (CPC) is a harmonization of the U.S. and European existing patent classification systems, the European Classification System (ECLA) and the U.S. Patent Classification (USPC). The change to the CPC was initiated through a joint partnership between the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO). The CPC is the result of the USPTO’s effort to provide a modern classification system that is internationally compatible; and a result of the EPO’s effort to eliminate the reclassification of U.S. patent documents and ensure compliance with International Patent Classification (IPC), administered by the World Intellectual Property Organization (WIPO).  The CPC is designed to have both US and European patent documents under a single classification scheme with a similar structure to that of the IPC. The joint classification system allows the USPTO and the EPO to efficiently share resources for classifying documents, revise the classification scheme where necessary, and to reclassify documents in an evolving world of technology.

In October 2010, the USPTO and EPO began working together to develop the CPC by incorporating the best practices of both the ECLA and USPC. The CPC was formally launched in January 2013, replacing the ECLA system at the EPO and initiating a two-year transition period at the USPTO for reclassification in an effort to begin phasing out the USPC in 2015. During this transition period the USPTO classified applications both in the CPC and the USPC systems while examiners received training on how to search in the CPC system and place CPC symbols on both granted patents and published patent applications. Going forward, both the EPO and USPTO will share maintenance of the CPC through a multi-year planning system for identifying areas requiring reclassification and a revised classification scheme. ECLA and USPTO symbols will not be removed from patent documents published prior to January 2013 and January 2015, respectively, for historical searching.

Two main objectives were theorized for the transition to the CPC. First, to improve patent searching by creating a more developed classification that the already existent IPC. Second, to efficiently share resources between the USPTO and EPO. Objectives, Cooperative Patent Classification. With these objectives in mind, the expected benefits of the CPC were enhanced examination efficiency, improved access to documents from patent offices around the world, improved navigation and understanding of a single classification system, improved consistency of search results across offices, facilitated work-sharing on applications filed across offices, and more adaptive and actively maintained classification schemes.

The transition to the CPC from the USPTO and ECLA has created a number of new obstacles for searchers and attorneys in the patent searching world. The CPC is divided into nine sections which are then subsequently divided into classes, sub-classes, groups, and sub-groups. In total, the CPC contains approximately 260,000 classification entries. The greater number of classification entries than previously used provides a more detailed scheme breakdown and more descriptive classification titles. See Cooperative Patent Classification(CPC): General Introduction into CPC, United States Patent and Trademark Office (July 10, 2012). As a result, a best practice for searchers and attorneys using the CPC is to understand the more detailed breakdown and recognize that a particular feature may be covered by multiple classes.

The CPC is one scheme that includes an indexing system, which resembles the current IPC indexing system. In the CPC, all symbols belong to a single scheme but differentiate by use and scope, rather than the use of different symbols for each ECLA and USPC scheme. Available tools for searching in the CPC system include the CPC concordances with the ECLA and IPC, and statistical mapping tools from USPC to CPC. The CPC website provides CPC concordances tables for ECLA to CPC and CPC to IPC for reference. Each table provides a conversion of ECLA classifications to CPC classifications or CPC classifications to IPC classifications. For example, a patent classified under a particular ECLA classification is aligned with the respective CPC classification for that patent.

Furthermore, the USPTO provides a statistical mapping tool for mapping from USPC to CPC. The statistical mapping is produced by a statistical analysis of symbols allocated to families of documents classified simultaneously in the CPC and USPC schemes. Each USPC symbol is mapped to a CPC symbol and possibly additional CPC symbols depending on relevance and contribution. Confidence in statistical mapping is low when the statistical results of mapping of one USPC symbol to many CPC symbols is large or the number of families having the corresponding CPC symbol statistically analyzed is small. See Statistical Mapping: FI to CPC, European Patent Office (July 20, 2016). For example, a USPC symbol allocated to a certain family of documents can be mapped to at least one CPC symbol when the statistical mapping returns (in between brackets), first, the number of families bearing the corresponding CPC symbol, and second, the percentage that these corresponding families represent over the total number of families classified under that CPC classification. If the number of families found bearing the corresponding CPC symbol is less than 3, the mapping will return “NOMAP”, meaning that no mapping is possible. Moreover, searchers and attorneys should note that mapping from USPC to CPC may not be reliably precise because mapping is based on statistical analysis due to the fact that the USPC is not based on IPC/ECLA systems.

Searchers and attorneys should also note that any saved alerts or saved search queries based on USPC will no longer return results (after 2015), and may need to be updated. Likewise, any historical search queries based on USPC will not return results (after 2015) if conducted today.

Beyond the Looking Glass: Patent-Eligible Subject Matter After Alice and Mayo

Posted on by Kinney & Lange, P.A.

By Erik Wright and Austen Zuege

From Intellectual Property Today, Vol. 21, No. 11 (November 2014)

In recent cases such as Alice Corp. v. CLS Bank Int’l, 134 S.Ct. 2347 (2014), the Supreme Court has reiterated that abstract ideas, laws of nature, and natural phenomena cannot be patented. Inventions directed to any of these three categories must include sufficient extra material to form the basis of a patent. The Court has provided some guidance as to what kinds of claim language can satisfy this requirement, but has thus far declined to define the principal categories of patent-ineligible subject matter in a way that can be applied prospectively. Instead, the Court seems satisfied that “they know it when they see it.”

In the absence of prospective rules, the courts are slowly accumulating an ad hoc list of examples of what they consider patent-ineligible subject matter. Most of these examples pertain to computer- and software-implemented technologies, and are decided by analogy to cases relating to those technologies. Troublingly, some judicial opinions have seemed to conflate the issue of patentable subject matter with the separate statutory issues of novelty and non-obviousness.

In the absence of a clear, prospective definition from the Supreme Court, the Federal Circuit has returned to an emphasis on physical or tangible results, characterizing data manipulation techniques as unpatentable abstract ideas. Recent Federal Circuit decisions in BuySAFE, Digitech, Planet Bingo, and I/P Engine have given broad software patent claims harsh treatment, and the Patent Trial and Appeal Board (PTAB) has followed suit. The BuySAFE opinion and a concurrence in I/P Engine do the most to try to make sense of this still unsettled area of patent law. We provide a summary of recent cases, as well as key precedents.

Mayo v. Prometheus

Mayo Collaborative Services v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2014), addressed the patent-eligibility of diagnostic methods and drug therapies for treating gastro-intestinal disorders. Mayo found that these claims were directed primarily toward a law of nature, Id. at 1294-96, and then asked whether other limitations in the claims provided an “‘inventive concept’ sufficient to ensure that the patent in practice amount[ed] to significantly more than a patent upon the natural law itself.” Id. at 1294. The Court asked whether claims were sufficiently limited to avoid preempting further innovation or exploration in the technical field. Id. at 1301. Building upon Flook and Diehr, the Court explained that neither postsolution nor presolution activity (e.g. collecting or reporting data) could save patentability if such activity was unrelated to the core “inventive concept.” Id. at 1303-04.

Alice v. CLS Bank

In May of 2013 the Federal Circuit issued an en banc decision in CLS Bank Int’l v. Alice Corp. 717 F.3d 1269 (Fed. Cir. 2013) (per curiam).   Alice concerned several patents with claims directed to business methods, systems, and a “Beauregard” style apparatus for computer-implemented escrow services. In a 7-3 decision with no majority opinion, the Federal Circuit held that Alice’s method and Beauregard apparatus claims were directed towards patent ineligible subject matter. The Circuit was evenly split as to whether Alice’s system claims were patentable.

In June of 2014 the Supreme Court unanimously held that all of Alice’s claims were ineligible for patenting.[1] According to the Court, analysis of patent-eligible subject matter questions involves a two-part test implicit in Mayo, and later elaborated on by the Federal Circuit. The first step in this test is determining “whether the claims at issue are directed to a patent-ineligible concept. If so, the court then asks whether the claims’ elements … transform the nature of the claim into a patent-eligible application.”[2] The Court provided no new guidance as to what constitutes an abstract idea or patent-ineligible concept, however, falling back on analogy to Bilski.[3] Contrary to the analysis of the Federal Circuit, and to its own precedent in Diehr and Flook, the Court appeared to rely on the fact that risk hedging, although not a “preexisting, fundamental truth,” was still a “fundamental economic practice” sufficiently well-known to establish it as a mere abstract idea. Alice at 2357. In Alice, as in Bilski, the Court seems to conflate issues of patent-eligible subject matter with what were previously considered separate questions of novelty and non-obviousness.[4] The Court ignored much of Mayo’s extensive discussion of “preemption,” and (again) sidestepped any sort of categorical holding on when commercial and social relationships in economic “processes” could ever be patent-eligible.

In the Federal Circuit

Shortly after Alice the Federal Circuit decided Digitech.[5] The claims in Digitech recited a method and a “device profile” used for image capture, transformation and reproduction, which the Circuit characterized as directed exclusively towards data manipulation and transformation. Citing Mayo and Alice, mere data manipulation was found categorically unpatentable as an “ethereal, non-physical” abstract idea. Id. at 1350. “Without additional limitations, a process that employs mathematical algorithms to manipulate existing information to generate additional information is not patent eligible.” Id. at 1351. The patent owner’s argument that the “device profile” was a tag or other embodiment of hardware or software was rejected as not reflecting the actual claim language. Id. Under the pre-emption analysis of Mayo, Judge Edmond explained that the claims at issue were “so abstract and sweeping as to cover any and all uses of a device profile,” an abstract idea. Id. Following this rule, any algorithmic data manipulation without physical transformations would appear to constitute an unpatentable abstract idea. Mere presolution or postsolution steps such as collecting data and reporting results via a conventional apparatus remain insufficient to satisfy the second prong of the Mayo/Alice test.

Although the majority and dissenting opinions of IP Engine v. AOL[6] did not address patentable subject matter, Senior Judge Mayer wrote a concurrence specifically to address patent eligibility of claims directed to a method for filtering Internet search results.[7] Judge Mayer provocatively argued that Alice “for all intents and purposes, recited a ‘technological arts’ test for patent eligibility.” Id. at *9. He interprets Mayo and Alice to say that:

“[s]ection 101 mandates not only that claims disclose an advance in science and technology—as opposed to an innovation in a non-technological discipline such as business, law, sports, sociology, or psychology—but also that this advance be both significant and well-defined. *** [I]f claims are drawn to the application of principles outside of the scientific realm—such as principles related to commercial or social interactions—no amount of specificity can save them from patent ineligibility. *** In the more difficult cases—where it is uncertain whether claims are sufficiently ‘technological’ to warrant patent protection—subject matter eligibility will often turn on whether the claims describe a narrow inventive application of a scientific principle, or instead simply recite steps that are necessarily part of the principle itself. *** At its core, section 101 prohibits claims which are ‘overly broad[]’ . . . in proportion to the technological dividends they yield. Id. at *10.

Mayer sees this as a Constitutional limit of patent eligibility. Id. at *11. While his statements go far beyond the literal language of Alice and Mayo,[8] they nonetheless seem to explain the actual results of those and other recent cases, and pick up the question of the “preemption” raised in Mayo but not analyzed in Alice. Judge Mayer found that the I/P Engine claims represented “merely an Internet iteration of the basic concept of combining content and collaborative data,” as a person might do manually by consulting a guidebook and asking friends for suggestions while planning a visit to London. Id.

Planet Bingo[9] dealt with claims to a computer system for managing bingo games, and in particular storing bingo numbers for multiple game sessions. The Federal Circuit found the claims ineligible for patenting. Returning to a familiar pre-Bilski “machine-or-transformation” analysis, the Federal Circuit asked, hypothetically, whether the method could have been performed solely using “mental steps.” Under this analysis, the mere recitation of a computer added no meaningful limitation to the claims. The patent owner’s argument that humans could not manage the “thousands, if not millions” of numbers involved were rejected as not being commensurate with the explicit language of the claims, which only required “two sets of Bingo numbers”. Id. at *2–3. In an faint echo of a technological arts test (but with little explicit analysis), the Federal Circuit determined that the solution of a “tampering problem” and “other security risks” constituted unpatentable abstract ideas that failed to add “significantly more”, drawing analogies to Bilski and Alice.

The Federal Circuit also recently issued the precedential opinion BuySAFE, Inc. v. Google, Inc.[10] BuySAFE dealt with method and Beauregard claims toward providing a performance guarantee for an “online commercial transaction” via a “computer network”. Id. at 1351-52. In keeping with Digitech, BuySAFE noted that this “inventive concept” must exist “in the physical realm”—data manipulation is not sufficient. Id. at 1353. The claims were held to be “squarely about creating a contractual relationship” that was “beyond question of ancient lineage” and the “invocation of computers add[ed] no inventive concept.” Id. at 1355. The mere fact “that a computer receives and sends the information over a network—with no further specification—is not even arguably inventive.” Id. However, citing Bilski, the opinion adds the caveat that “[i]f enough extra is included in a claim, it passes muster under section 101 even if it amounts to a ‘business method.’” Id. at 1354. An example of a “business method” that recites an “inventive concept” sufficient to establish patent eligibility has yet to pass before the Supreme Court, and none of the post-Alice Federal Circuit (or PTAB) decisions have found one either. Quoting Alice, the BuySAFE opinion further discusses a need to “effect an improvement in any other technology or technical field[.]” Id. (emphasis added). Whether other Federal Circuit judges will join Judge Mayer in establishing an explicit post-Alice “technological arts” test therefore remains to be seen. If any sort of consensus view is emerging on the Federal Circuit, it may be less due to insights provided by Alice and more a result of the changing makeup of the court and the chance makeup of the panels hearing recent cases.

At the Patent Trial and Appeal Board

In Bancorp v. Retirement Capital[11] a review under the Transitional Program for Covered Business Method Patents of U.S. Pat. No. 6,625,582 found claims unpatentable as directed to an abstract idea. The patent related to a “computerized method” for converting future social security payments into immediate disbursements. Id., at *2–3. By way of analogy to the claims in Bilski and Alice, the PTAB panel found that “the concept of advancing funds based on future retirement payments is an economic practice long prevalent in our system of commerce and squarely within the realm of abstract ideas.” Id. at *6–7. The PTAB determined that a preamble recitation of “a computerized method” did not meaningfully limit the claims, and that claims reciting payments “deposited into accounts” did not require a computer, since they “could be performed as a series of verbal transactions exchanging physical money or via pen and paper.” Id. at *7. Similarly, the PTAB held that a means-plus-function limitation requiring “electronic transfer” only used a computer in a generalized fashion. Id. at *6. Here, the Specification worked against the patent owner, because it referred only to “known computer capabilities” and “the well-known technique of electronic funds transfer.”

By failing to present the claimed steps as representing new computer programming or hardware rather than known, general purpose computer equipment and techniques, the patent failed to meaningfully limit the abstract idea it invoked, rendering it patent-ineligible. “Neither the claims nor the specification provide[d] complex technological implementations or modifications of” the technologies involved, and the patent “recite[d] no specific technological mechanism for achieving its result.”[12] This analysis suggests that if complex programming is not described somewhere in a patent application for a software-related invention, there is a substantial risk of fatal patent eligibility concerns. The PTAB panel mentioned in passing the question of preemption by “encompass[ing] the full scope of an abstract idea” but did not rule on that question or even assign it to any particular step of the overall eligibility analysis. Id. at 20.

What’s Next?

Recent district court decisions have offered new analyses of a wider range of claimed technologies. For instance, a very articulate order in McRO, Inc. v. Activision Publ’n, Inc., CV-14-336 (C.D. Cal. Sept., 22, 2014), struck down claims for lip-synching of animation as patent ineligible because a generic recitation of “rules” at the point of novelty merely required automation of known, manual processes, and was therefore preemptive. Although the claimed point of novelty went beyond the prior art, that “extra” recitation was still found to be an unpatentable abstract idea. Another district court case, Tuxis Techs., LLC v. Amazon.com, Inc., No. 13-1771 (D. Del., Sept. 3, 2014) employed, at least in part, a different analysis than post-Alice Federal Circuit or PTAB decisions. Although the court credits this analysis to Alice (when Mayo seems closer), it directly assessed whether the claims were “preemptive” by looking to a list of hypothetically non-infringing processes enumerated by the patent owner. Cases like these will be worth watching if appealed.

[1] Alice Corp. v. CLS Bank Int’l, 134 S.Ct. 2347 (2014).

[2] Id. at 2355, citing Mayo, 132 S.Ct. at 1296–97.

[3] Bilski v. Kappos, 561 U.S. 593 (2010), determined that claims to a business method for risk hedging were directed to an unpatentable abstract idea, but rejected the Federal Circuit’s exclusive use of the “machine or transformation” test in favor of a vaguer and highly discretionary inquiry based in part based characterizing the underlying principles of the claims as being old and well-known.

[4] Diamond v. Diehr and Parker v. Flook, for instance, state that the issue of subject matter patent eligibility is distinct from and unrelated to novelty and obviousness inquiries. Diehr, 450 U.S. at 188; Flook, 437 U.S. at 588.

[5] Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014) (concerning U.S. Pat. No. 6,128,415).

[6] IP Engine, Inc. v. AOL Inc., 2014 WL 3973501 (Fed. Cir., Aug. 15, 2014) (non-precedential).

[7] The claimed filtering system used both content based filtering (e.g. extracting features such as text from an information item) and collaborative filtering (e.g. assessing relevance based on feedback from other users).

[8] But compare MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250 (Fed. Cir. 2012) (Mayer, J., dissenting).

[9] Planet Bingo, LLC v. VKGS LLC, 2014 WL 4195188 (Fed. Cir., Aug. 26, 2014) (non-precedential).

[10] BuySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014).

[11] U.S. Bancorp v. Retirement Capital Access Mgmt. Co., 2013 WL 8538864, CBM2013-00014 (PTAB, Aug. 22, 2014).

[12] Id., but contrast Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1342,1353 (Fed. Cir. 2013).

Strategic Third-Party Submissions Against Patent Applications

Posted on by Kinney & Lange, P.A.

By Austen Zuege

From Intellectual Property Today Vol. 19, No. 12 (December 2012)

The Leahy-Smith America Invents Act (AIA) expanded opportunities for third parties to submit publications and comments against patent applications pending before the U.S. Patent & Trademark Office (USPTO). New procedures under 35 U.S.C. § 122(e) and 37 C.F.R. § 1.290 went into effect September 16, 2012 that provide a window for third-party pre-issuance submissions with explanations of relevance. Used strategically, these procedures can provide a powerful and cost-effective tool for reducing infringement risks from overly broad patent claims. Legislative history claims these submissions “will allow the public to help the PTO correct its mistakes, and ensure that no patent rights are granted for inventions already available to the public.”[1] Pre-issuance submissions were permitted before, but the AIA has made them more attractive. Similar procedures are available in Europe.[2] Third-party observations can also be submitted against PCT applications up to 28 months after the earliest priority date.[3] Businesses confronted with patent-active competitors or patent trolls should consider the benefit of standing programs for third-party submissions. Success of these programs will depend on diligent monitoring of application publications. A defensive (non-patent) publication program could also bolster a pre-issuance submission strategy.[4] Practitioners should consider advising clients about pre-issuance submissions whenever applications of interest are timely discovered.

Old Procedures

Pre-issuance, third-party submissions under 37 C.F.R. § 1.99 (2011) have been eliminated.[5] That comes as no loss because no explanation of relevance of the submitted documents was permitted and timing restrictions were severe. [6] As a corollary, third parties sometimes send prior art materials to an applicant’s patent attorney. To avoid allegations of inequitable conduct, the receiving attorney may need to disclose it pursuant to 37 C.F.R. § 1.56. This situation can (and will) still occur under the AIA, particularly if § 122(e) deadlines have passed.

Public use proceedings under 37 C.F.R. § 1.292 have been also eliminated. Third parties can now only challenge a pending application based on prior public use through a protest, or else wait to pursue post-grant review or a civil action.

Protests can still be made against a pending patent application under 37 C.F.R. § 1.291.[7] As before, protests require citation of information (e.g., prior art) relied upon and a statement of relevance.   However, protests are barred after an application publishes unless the applicant consents, ensuring third parties can almost never file them outside of reissue. 35 U.S.C. § 122(c).

New Procedures

Items submitted under § 1.290 must be identified on a document list. A dedicated online interface is available for third-party submissions, and the USPTO has created a document list form SB/429 for paper filings.[8] Identification of the real party in interest is not required, and the submitter need not be a registered patent attorney or agent. 77 Fed. Reg. at 42154 and 42164-65 (July 17, 2012). Although that allows “straw man” filings, waiver of privilege issues might arise in those situations.

Many types of publications can be submitted under § 1.290. Submissions need not be “prior art” but could be information relevant to claim interpretation (e.g., dictionary definitions), data to rebut secondary evidence of non-obviousness, evidence that items are known substitutes, background information on how concepts were understood to solve similar problems in another industry, a published court opinion dealing with similar claims, etc. See 77 Fed. Reg. 42154 and 42161. The submitted art can be cumulative, so third parties can, for instance, resubmit prior art of record with a concise statement of relevance that calls the examiner’s attention to an obscure portion of the document(s) or provide a more extensive translation of a non-English document. Id. at 42153 and 42162. However, submitters are “cautioned that submission of documents drafted after the application was filed solely to contest patentability may result in non-entry of an entire third-party submission.” Id. at 42163.

The concise statement of relevance for a given document should be a claim chart or a narrative description, but for a given document only one can be provided (not both). 77 Fed. Reg. 42156 and 42164. Prominent headings should be used, to assist USPTO screening. A statement could, for instance, describe inherent features or point out items that appear only in a drawing. These statements are not treated as independent “evidence” but as a factual summary of the documents they describe. Id. A bare statement that a document is relevant is insufficient. Id. It remains to be seen how strictly the concision requirement will be enforced, though in all likelihood examiners will give very lengthy statements only cursory review.

The USPTO will not accept proposed rejections. 77 Fed. Reg. 42156 and 42164; cf. H.R. Rep. No. 110-314 at 36-37 (2007). However, a well-composed claim chart may imply much the same point. Prior art charts will be most effective when they address all limitations to support novelty rejections. Relying on examiners to formulate obviousness rejections based on submitted prior art that requires a complex combination of numerous references or a highly creative motivation for the combination may be unwise. The USPTO desires statements of relevance to be on separate papers, rather than on a single combined document. Id. at 42156. That is not a requirement in the final rule (though instructions for document list form SB/429 imply that it is). Practitioners may prefer a single claim chart, but the electronic filing interface will not accept a single document with statements covering multiple publications. If multiple charts are used, filling in only key entries may call attention to a possible (yet unstated) obviousness rejection better than filling in every possible chart cell. Still, as a rule of thumb, anytime a submission seems to require a common claim chart for multiple documents it is probably too complex for effective pre-issuance submission.

A first submission can include up to three documents for free. For 4-10 publications, the fee is specified by 37 C.F.R. § 1.17(p), currently $180.00. For additional documents, additional fees are required and, if filed electronically, separate submissions must be made for each set of ten documents. Document counts for online materials will be treated on a case-by-case basis. 77 Fed. Reg. 42163. Different articles on different pages of a given web site will count as separate documents, while a single article spanning multiple web pages will constitute only a single document. Id. If in doubt, assume extra fees apply.

English translations are required for foreign-language publications, but only for portions identified as being of relevance on the document list. § 1.290(d)(4); 77 Fed. Reg. 42156 and 42160-61. Listing an entire document requires a complete translation. The translation can be “a reliable machine translation and need not be certified.” Id.

The document list must identify the date of publication or other date when a non-patent publication was publicly available. § 1.290(e)(4); 77 Fed. Reg. 42154 and 42161-62. Date evidence may be difficult to establish, such as for marketing pamphlets or web pages. To establish dates for web pages, the USPTO will accept printouts from web archives, like www.archive.org, or dates of retrieval stamped on printouts. Declarations, affidavits, or corroborating evidence can also be submitted, though the applicant can dispute such evidence without the submitter having an opportunity for a sur-reply. Id. at 42157 and 42161-62. Documents with cloudy publication histories may be poor candidates for pre-issuance submissions, and may be better held for a post-issuance challenge. If corroborating evidence is omitted from the document list, it will not count for fee calculations. Failure to sufficiently establish publication data for even one item on the document list will make an entire submission non-compliant—so don’t neglect this requirement. Id.

Pre-allowance submissions must be received by the USPTO prior to the later of either (a) six months after publication or (b) the date of a first rejection is given or mailed. 35 U.S.C. § 122(e)(1)(B). Certificates of mailing are not available, making electronic filing preferable. § 1.290(i); 77 Fed. Reg. 42155, 42158 and 42167. Restriction requirements mailed more than six months after publication typically lack a claim rejection and therefore should not bar third-party submissions. Yet as soon as a notice of allowance is mailed it is already too late for a submission. 35 U.S.C. § 122(e)(1)(A). For maximum effectiveness, with less chance of disregard due to examiner “inertia,” submissions should be made before a first office action.

An entire third-party submission must be compliant for entry, and partial non-compliance—other than minor typographical errors—will result in non-entry of the entire submission. 77 Fed. Reg. 42152, 42155 and 42167-69. The USPTO can provide submitters an e-mail notice of non-compliance, which will not be included in the official record. Id. If a third-party filing under § 1.290 is deemed non-compliant, opportunities for correction are limited. Deadlines are not tolled for resubmissions. Any corrected, resubmitted materials must be received by the USPTO prior to the statutory deadlines. Therefore, materials should be submitted as early as possible to permit re-submission as needed. In particularly complex situations, separate submissions can compartmentalize risk that a defect with respect to one will adversely affect submission of the remaining documents. If a third party believes a submission was improperly deemed non-compliant, a petition to the Director of the USPTO should theoretically be possible under 37 C.F.R. §§ 1.181 or 1.182.

The new § 122(e) procedures are not available for reissue applications, reexaminations or other post-issuance proceedings. 77 Fed. Reg. 42151. However, “[w]here a submission is filed under § 1.290 in a reissue application, the [USPTO] will process the submission as a protest under § 1.291 . . . .” Id. at 42154.

Monitoring Programs

Pre-issuance submissions are useful only so much as the third party becomes aware of the relevant application in time to act. A monitoring program is therefore crucial. Such a program can bring additional value beyond § 1.290. It dovetails nicely with ongoing freedom-to-operate analyses, and helps prepare for possible post-grant review proceedings, permitted for only nine months after issuance.

There are many ways to monitor patent application activity. The simplest is to set up one or more automated keyword- or patent classification-based searches using electronic patent databases. These searches can monitor particular assignee or applicant names, keywords relating to the technology, or patent classifications, and can provide automated alerts whenever new publications meet the criteria. Such searches can run periodically. Because the USPTO publishes applications every Thursday, the shortest necessary interval is weekly. An interval no greater than three or four months will ensure that published applications are found in time. The efficacy of the search will depend on recall of the selected keywords. If a foreign-originating application contains translations not contemplated in the search parameters (e.g., “airfoil” vs. “aerofoil”), forget about finding that application. Subject-matter-based keywords and patent classification searches may provide the broadest automated search coverage, but may also lack precision—making filtering the results more burdensome. Revisiting search parameters periodically (e.g., yearly) is wise. Regarding the use of assignee names, note that published applications may or may not list the present or eventual assignee, depending on the information an applicant chooses to identify and when an assignment is completed. If the assignee name is omitted, a typical patent database will not return it in search results—meaning patent applicants might reduce adverse submissions by omitting assignee information or applying in the inventors’ names.

Ad-hoc approaches can include monitoring competitor activity in the marketplace, such as noting “patent pending” designations at trade shows, on web sites, etc. Although not comprehensive, this type of monitoring can cue more extensive analysis.

Manual searching provides a more robust approach to monitoring published applications. Chief among those efforts are patent clearance studies performed by patent counsel, particularly when new products or processes present new infringement risks.

For high-exposure technologies, a combination of monitoring approaches is best. No one approach will be perfect. Businesses should educate employees about monitoring efforts, to allow for action within the relatively short windows available for third-party submissions (or post-grant review). Reliable monitoring will require suitable staffing for analysis.

Strategy

Third-party submissions against pending applications are simply another risk management tool. They are not as robust as civil actions where a challenger has opportunities to present evidence of any kind, including expert testimony, and exert the greatest control over the presentation of evidence. Yet a court challenge must overcome a presumption of validity. 35 U.S.C. § 282. With inter partes review, the presumption of validity is gone, but attacks are limited to printed publications and estoppel attaches. Post-grant review has fewer restrictions on the grounds for challenges than inter partes review, but is subject to even more far-reaching estoppel. Ex parte reexamination allows proposed rejections, but carries high filing fees. Pre-issuance submissions, on the other hand, do not attach any estoppel effect. The same art used unsuccessfully for a pre-issuance submission could be used again for a post-issuance proceeding, which gives the third party quasi-appeal opportunities. Of course, once an examiner has considered prior art submitted by a third party, any resultant patent is presumed valid over that art.[9] In the end, third party submissions will be most useful for entities unable or unwilling to commit the resources for a civil action (typical cost: $350K-5M) or various post-issuance procedures (typical costs: $25-225K).[10] Industries already heavily involved in European oppositions will want to consider the new USPTO (and PCT) procedures, as will small to mid-sized businesses seeking low-cost options to reduce infringement risks.

[1] 157 Cong. Rec. S1323 at S1326 (Mar. 7, 2011) (comments by Sen. Sessions); see also D. Aste, “To Disclose or Not to Disclose,” 3 Case W. Res. J.L. Tech. & Internet 153, 155, 177-81 (2012) (discussing prior proposals); J. Matal, “A Guide to the Legislative History of the America Invents Act: Part I of II,” 21 Fed. Circuit B.J. 435, 493-94 (2011-2012).

[2] European Patent Convention Article 115 and Rule 114.

[3] Administrative Instructions under the Patent Cooperation Treaty, Part 8 (September 16, 2012); WIPO, “ePCT Third Party Observations,” (July 29, 2012) at http://www.wipo.int/pct/en/epct/pdf/epct_observations.pdf.

[4] Quasi-priority rights may make defensive publications somewhat less worrisome. 35 U.S.C. § 102(b)(1)(B) (effective March 16, 2013).

[5] Post-grant submissions are also still possible under 35 U.S.C. §301 and 37 C.F.R. § 1.501.

[6] Furthermore, two USPTO “Peer-to-Patent” pilot programs allowed third-party patent examination input.   Participation was voluntary on the part of the applicant, and was limited by technology area. See Peertopatent.org.

[7] See also MPEP § 1900 et seq.

[8] See http://www.uspto.gov/forms/3prsubmission_instructions.pdf.

[9] On the other hand, a submission could assist in a later infringement suit, based on the cannon of construction that claims are construed to preserve validity and because an allowance over that submission requires those claims be construed to cover something else. This may assist defenses against patent trolls, when a claim term may be construed in another civil action before the being asserted against the third-party submitter (now faced with reduced claim construction latitude).

[10] See AIPLA, “Report of the Economic Survey 2011,” (July 2011), Tables I-142, I-153, I-154, I-174.

A New Era for Patent-Eligible Subject Matter

Posted on by Kinney & Lange, P.A.

By Austen Zuege

From Intellectual Property Today, Vol. 19, No. 5 (May 2012)

The Supreme Court has announced a new approach to assessing patent subject matter eligibility under 35 U.S.C. § 101. Bilski v. Kappos “punted” and did little more than reiterate that laws of nature, physical phenomena, and abstract ideas are ineligible for patent protection, stating that the machine-or-transformation (“MoT”) test may be a useful and important clue or investigative tool but is not the sole test for deciding whether an invention is a patent-eligible “process”. [1] But in Mayo Collaborative Servs. v. Prometheus Labs., Inc., a unanimous Court made “preemption” a primary criterion for patent-eligible subject matter under § 101.[2] Broad generic claims are not patent-eligible unless they permit some other activity in the same field of endeavor. This frames the analysis under § 101 in much the same way certain genus/species and functional claiming issues have been addressed under the enablement and definiteness requirements of 35 U.S.C. § 112.[3] While Mayo dealt with laws of nature and medical treatments, certain recent Federal Circuit opinions have applied a similar analysis to software and business method claims, and the Supreme Court recently remanded a case to the Federal Circuit to reconsider patentability of DNA isolation in view of Mayo.[4]

MEDICAL TREATMENTS

Mayo involved claims to drug therapies for treatment of immune-mediated gastrointestinal disorders.[5] The Supreme Court found the claims unpatentable under § 101. The Court considered whether the claims merely described a law of nature, “namely the correlations between thiopurine metabolite levels and the toxicity and efficacy of thiopurine drug dosages[.]” Mayo, 2012 WL 912952 at *8. The key inquiry was whether “the patent claims add enough to their statements of the correlations to allow the processes they describe to qualify as patent-eligible processes that apply natural laws?” Id. at *5,8.

The Court held that claims written “too broadly” or “overly broad” so as to foreclose innovation in a particular field of endeavor are unpatentably preemptive under § 101. “[T]he underlying functional concern here is a relative one: how much future innovation is foreclosed relative to the contribution of the inventor[?]” Mayo, 2012 WL 912952 at *15. This is very much like saying that an inventor of particular inventive species cannot claim an entire genus that effectively precludes the development of further inventive species in the same field. “Unlike, say, a typical patent on a new drug or a new way of using an existing drug, the patent claims [in suit] do not confine their reach to particular applications of those laws. The presence here of the basic underlying concern that these patents tie up too much future use of laws of nature simply reinforces our conclusion that the processes described in the patents are not patent eligible . . . .” Id. at *14.

According to Mayo, “a process that focuses upon the use of a natural law [must] also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.” 2012 WL 912952 at *5. What is an “inventive concept”? The Court formulated the analysis in negative rather than positive terms: one cannot merely “pick[] out the relevant audience” or recite “well-understood, routine, conventional activity[.]” Id. at *8-9,11. Claims cannot simply reserve the commercial market for a law of nature, that is, use of the law of nature in a given technological or economic environment, without explicitly reciting a useful new contribution within that environment. Such claims are unpatentably preemptive when drafted in an open-ended fashion that allows key steps to be performed with “whatever process the doctor or laboratory wishes to use[,]” rather than with a specific, new methodology.[6]

While past Supreme Court opinions focused on “post-solution” activities being non-patentable, the new approach reformulates that doctrine as a concern with claims to pre-solution activities. Mayo, 2012 WL 912952 at *9. This more practical formulation asks whether the claims recite enough technical detail, and presumes that audience or market identification activities do not reach “inventive concept” activities. The new touchstone is that claims must recite enough detail to document a particular, non-conventional, non-obvious technological contribution beyond (i.e., subsequent to) merely “picking out the relevant audience” or economic market. The applicability of Mayo to software or business method claims will likely center on this inquiry.

Although Mayo makes no reference to any Federal Circuit case law, it rejected the position argued by the Government as amicus curiae and often espoused by certain Federal Circuit judges, that the underlying concerns can be resolved under §§ 102, 103 and 112, because the judicially-created exceptions to § 101 would then be “dead letter”.[7] Patentability analysis under § 101 may overlap with other inquiries, but it cannot be subsumed by them.

SOFTWARE AND BUSINESS METHODS

Mayo dealt with medical procedures, but it echoed a number of recent opinions from a particular faction of Federal Circuit judges in the areas of software and business methods, which are assessed for their relationships to “abstract ideas”.[8] Those cases held that a claim cannot carve out a portion of an abstract idea for patent protection merely on the basis of reciting an incidental machine, computer or broad field of endeavor. Dealertrack, 2012 WL 164439 at *17-18. A patentee cannot simply carve up the economic marketplace for an abstract idea by limiting herself to activities involving a computer.  Claims that are “preemptive of a fundamental concept or idea that would foreclose innovation” in a given area are too abstract to be patent-eligible. Id. at *16. For example, “using a clearinghouse generally and using a clearinghouse specifically to apply for car loans, like the relationship between hedging and hedging in the energy market in Bilski II, is of no consequence without more.” Id. at *18. The problem of preemption is not overcome unless the claims reduce the level of abstraction below a threshold. How much is required in the claims is the heart of the matter. In the language of Mayo, one would ask whether the recitation of a machine, computer or broad field of endeavor describes a non-conventional, non-obvious “inventive concept” more specific than the underlying abstract idea. This is a matter of identifying what is the relevant economic market or field of endeavor (i.e., the abstract idea), and deciding whether a broad (genus) claim effectively forecloses all of it.

Establishing New Preemption Criteria

Some recent Federal Circuit cases have sought more detailed criteria for patentability. The boldest case is Cybersource, which struck down so-called Beauregard claims, stating that “merely claiming a software implementation of a purely mental process that could otherwise be performed without the use of a computer does not satisfy the machine prong of the [MoT] test.” Cybersource, 654 F.3d at 1375. Cybersource held that “the basic character of a process claim drawn to an abstract idea is not changed by claiming only its performance by computers, or by claiming the process embodied in program instructions on a computer readable medium.” Id. Later opinions confirmed this view. “Simply adding a ‘computer aided’ limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible.” Dealertrack, 2012 WL 164439 at *17; accord Fort Props., 2012 WL 603969 at *6. This recalls Mayo’s instruction that reciting conventional or obvious activity is insufficient. In view of these opinions, owners of patents with Beauregard claims may wish to consider reissue.

Judge Rader has emphasized that “[t]he court does not define the level of programming complexity required before a computer-implemented method can be patent eligible.” Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323, 1328 (Fed. Cir. 2011). However, the Fort Properties opinion cited Ultramercial approvingly where Judge Rader pointed out claim language in which “[m]any of these steps are likely to require intricate and complex computer programming” and that “[v]iewing the subject matter as a whole, the invention involves an extensive computer interface.”[9] Judge Rader was detailing how the claims would meet an “inventive concept” or technological arts test for preemption, even as he declined to establish a definite threshold.

Machine-or-Transformation?

Strikingly, Mayo did not utilize the MoT test at all. Preemption has instead become a separate inquiry that perhaps takes precedence over the MoT test. This may make the MoT test something of a secondary inquiry, useful only where there is some nominal recitation of a specific “inventive concept” to alleviate preemption concerns.

The “transformation” prong of the MoT test rarely supports patentability in close cases. Few if any “processes” outside the realm of manufacturing methods seem to satisfy that prong, because an “abstract concept cannot be transformed into patentable subject matter merely because of connections to the physical world through deeds, contracts and real property.” Fort Props., 2012 WL 603969 at *5. Moreover, “mere manipulation or reorganization of data . . . does not satisfy the transformation prong.” Cybersource, 654 F.3d at 1375.

For the “machine” prong of the MoT test, recent Federal Circuit case law has focused on recitations of a computer or computer-readable medium. These analyses recall Mayo, and address the possibility of performing a method mentally. “[T]he incidental use of a computer to perform [a] mental process . . . does not impose a sufficiently meaningful limit on . . . claim[] scope.” Cybersource, 654 F.3d at 1375. “In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations.” SiRF Tech., 601 F.3d at 1333. The undefined phrase “computer aided” does not make the claimed concept less abstract where “[t]he claims are silent as to how a computer aids the method, the extent to which a computer aids the method, or the significance of a computer to the performance of the method.”. Dealertrack 2012 WL 164439 at *17. The Cybersource and Fort Properties opinions (both finding claims unpatentable) noted that the patent owners admitted the methods could be performed mentally, while in SiRF (finding claims patentable) there was no evidence that the invention could be performed purely mentally.

EMERGING VIEWS

It is still a matter of guesswork to articulate a positive test for patentable subject matter base on recent cases. However, the order of analysis from older Supreme Court precedent has effectively been reversed. “Preemption” has become a separate and distinct test, one that may or may not be supplemented with the MoT test. Furthermore, emphasis on an “inventive concept” requirement may be a step toward something like a technological arts test.

Recent cases express concern for how patent claims can preempt what amount to entire economic markets, thereby foreclosing further innovative activity. While it may take great business skill to identify lucrative market segments, those activities don’t seem to contribute an “inventive concept” to the useful arts in the manner required. Courts won’t allow patent claims to carve up economic markets based only on cursory reference to practical implementations that make a market lucrative. Such monopolization “through the grant of a patent might tend to impede innovation more than it would tend to promote it.” Mayo, 2012 WL 912952 at *4. These are old concerns for enablement and definiteness, but are new under § 101 analyses.

Patent claims must generally establish how to achieve a technical solution, not merely identify what a desired result may be. It is not enough to write a claim that conveys no more than surveying a landscape, choosing the most desirable tract, and saying from a distance, with finger pointing, “I claim this in the name of Spain.” Doing so potentially forecloses exploration of that territory, which, in this example, was of course preexisting. A technological contribution or “inventive concept” establishing how something new was achieved in the territory must be evident from the claims in a non-trivial way. Even where a technological contribution is disclosed in a patent specification, claims written at such a high level of abstraction that the specific technological contribution cannot be discerned still raise patent-eligibility concerns. The technical contribution could be small. Seasoned practitioners understand that patents usually cover small, incremental improvements. But if claims do no more than identify a realm of economic opportunity, they would seem too broad. Such claims are likely now unpatentably preemptive under § 101.

In software development, a common concern is that there may be so many alternative means to achieve a given objective that unless preemptive claims are obtained the patent is “worthless”. This calls for hard decisions. Those seeking patent protection will be forced to disclose all the important species and claim them piecemeal, expending considerable effort to create a patent thicket, or content themselves with more limited claim coverage that allows others to develop and practice alternative technical solutions. But without restrictions on preemption, litigation pitting “patent trolls” against productive industry risks turning letters patents into letters of marque and reprisal, the historical authorizations for “privateers” to capture foreign ships at sea and bring them before admiralty courts for condemnation.

Mayo hardly ends the § 101 saga. Expect further litigation before these issues are settled.

[1] 130 S.Ct. 3218, 95 U.S.P.Q.2d 1001 (2010) (“Bilski II”).

[2] 2012 WL 912952 (U.S. March 20, 2012) (No. 10-1150).

[3] The Court discusses O’Reilly v. Morse, 15 How. 62, 112–120, 14 L.Ed. 601 (1854) at length, but makes no reference to predictability of the art. Contrast M.P.E.P. § 2164.03.

[4] Ass’n Molecular Pathology v. Myriad Genetics, 2012 WL 986819 (March 26, 2012).

[5] U.S. Pat. Nos. 6,355,623 and 6,680,302.

[6] Id. at *8-9. Compare Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946) and later cases under § 112, ¶ 2 on functional claiming at the point of novelty. E.g., Ex parte Miyazaki, 89 USPQ.2d 1207 (BPAI 2008); Halliburton Energy Servs., Inc. v. M-I LLC, 514 F.3d 1244 (Fed. Cir. 2008).

[7] 2012 WL 912952 at *15-16; contrast Myspace, Inc. v. GraphOn Corp., 2012 WL 716435 (Fed. Cir. 2012). It is curious to call judicially-created doctrines “dead letter”. But this may simply set the stage for a constitutional analysis. See In re Comiskey, 554 F.3d 967, 976-77 (2009) (revised opinion).

[8] Key opinions by this faction include Fort Props., Inc. v. Am. Master Lease LLC, 2012 WL 603969 (Fed. Cir. Feb. 27, 2012); Dealertrack, Inc. v. Huber, 2012 WL 164439 (Fed. Cir. Jan. 20, 2012); Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011); SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319 (Fed. Cir. 2010); and Comiskey, 554 F.3d 967.

[9] Ultramercial, 657 F.3d at 1328. Ultramercial’s U.S. Pat. No. 7,346,545 disclosed no software code and only high-level flow charts.