PTO Speechless!! Fed. Cir. Says Evidence Needed for Ineligibility

Despite contrary statements in certain board decisions,¹ the patent office’s guidance to the examining corps has been consistent: facts are unnecessary when rejecting a claim under 35 U.S.C. § 101. Early on, the patent office’s July 2015 subject matter eligibility update responded to concerns about whether examiners were properly making out a prima facie case of ineligibility by stating that patent eligibility was a question of law, and that no facts were necessary to make out a prima facie case.² The MPEP has also been amended to reflect this view,³ and the superfluity of facts to eligibility appears to be a foundational assumption for the application of section 101 during examination.⁴

However, in light of the Federal Circuit’s recent decision in Berkheimer v. HP, Inc., the end of fact-free subject matter eligibility determinations may be near. In Berkheimer, the claims at issue were found to be directed to an abstract idea, so the case turned on whether the claims included additional elements sufficient to transform the nature of the claim into a patent eligible application rather than a patent ineligible abstraction.⁵ The district court found that there were no such additional elements, because what additional elements the claims did recite described “steps that employ only ‘well-understood, routine, and conventional’ computer functions … at a high level of generality.”⁶ The patent owner disagreed, arguing that portions of the patent’s specification referring to various benefits provided by the invention contradicted the finding that the claims described well, understood, routine, and conventional activities.⁷ The Federal Circuit then analyzed the claims and, because it found that some of them recited steps for providing the improvements described in the specification,⁸ vacated the district court’s holding of ineligibility.⁹ More important than the result though, was the reasoning. The Federal Circuit specifically explained that the allegations of improved results from the specification created an issue of fact,¹⁰ and that “the district court erred in concluding that there are no underlying factual questions to the § 101 inquiry.”¹¹ It also stated explicitly that “whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact” and that “[a]ny fact, such as this one, that is pertinent to the invalidity conclusion must be proven by clear and convincing evidence.”¹² – i.e., the exact opposite of the patent office’s position on the issue.

Before posting this article, I called the PTO’s office of patent legal administration to ask if they were aware of the Berkheimer case and if they intended to update their guidance in light of its holding. While I was told that they were aware of the case, the person I spoke to did not know if there were plans to issue updated guidance based on its reasoning, or (if such updated guidance was in the works) when such updated guidance might be issued. Accordingly, at least for the foreseeable future, it appears that the primary channel for Examiners to be made aware of the Berkheimer case may be through their interactions with patent prosecutors.¹³ However, given the potential significance of treating eligibility as involving underlying questions of fact, it would seem highly inappropriate for the PTO not to react to Berkheimer. As a result, while they may not be saying anything about it now, this is an issue where they shouldn’t remain speechless for long.

Photo credit from Flikr.com.

¹ See, e.g., Ex parte Poisson, Appeal No. 2012-011084 on application 12/427,040 (PTAB 2015) at 5:

The PTO bears the initial burden of establishing a prima facie case of patent-ineligible subject matter under 35 U.S.C. § 101. Because the facts and evidence do not support the finding that claim 1 is “an attempt to claim a new set of rules for playing a card game” and therefore, necessarily, is an abstract idea, a prima facie case of patent-ineligible subject matter under 35 U.S.C. § 101 has not been established in the first instance by a preponderance of the evidence.

² July 2015 Update: Subject Matter Eligibility at 6:

Concern was expressed about examiners satisfying the proper burden for a prima facie case when making an eligibility rejection. … The courts consider the determination of whether a claim is eligible (which involves identifying whether an exception such as an abstract idea is being claimed) to be a question of law. Accordingly, courts do not rely on evidence that a claimed concept is a judicial exception, and in most cases resolve the ultimate legal conclusion on eligibility without making any factual findings.

³ See MPEP 2106.07(a)(III) (“the courts do not require any evidence when conducting the significantly more inquiry, even where additional elements were identified as well-understood, routine and conventional in the art.”).

⁴ See, e.g., Office Action of August 28, 2015 on application 12/610,069 at 18-19:

Applicants argue that the Examiner “merely asserts the claim is directed to the abstract idea of generating, transmitting, and providing an advertisement to a consumer.” The undersigned notes that the unsupported assertion appears to be little more than boilerplate not supported by an[y] evidence or analysis.” Examiner replies that the “courts consider the determination of whether a claim is eligible (which involves identifying whether an exception such as an abstract idea is being claimed) to be a question of law. Accordingly, courts do not rely on evidence that a claimed concept is a judicial exception, and in most cases resolve the ultimate legal conclusion on eligibility without making any factual findings.”

⁵ Berkheimer at 11-12:

Because the claims are directed to an abstract idea, we proceed to the second step of the Alice inquiry. At step two, we “consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent eligible application.” Alice, 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 78–79).

⁶ Id. at 13.

⁷ Id.

⁸ Id. at 17 (“These claims recite a specific method of archiving that, according to the specification, provides benefits that improve computer functionality.”).

⁹ Id. (“We vacate the district court’s grant of summary judgment that claims 4-7 are ineligible under § 101 and remand for further proceedings.”).

¹⁰ Id. (“there is at least a genuine issues of material fact in light of the specification regarding whether claims 4-7 archive documents in an inventive manner that improves these aspects of the disclosed archival system.”)

¹¹ Id. at 14.

¹² Id. at 12.

¹³ Indeed, even in areas where the PTO does provide guidance, interactions with patent attorneys may constitute a type of on the job training that could have a significant impact on how applications are handled. See Who Trains Whom, JUST-N-EXAMINER, available at http://just-n-examiner.livejournal.com/25641.html (visited Feb. 13, 2018).

Fed. Cir. Hears Mobile Interface Eligibility Appeal - What Happened Next BLEW MY MIND

The result of Core Wireless v. LG should have been a foregone conclusion. Core Wireless was a subject matter eligibility case, which are notoriously difficult for patentees. Moreover, the invention in Core Wireless was remarkably similar to the invention found ineligible in Intellectual Ventures I v. Erie Indemnity. In Core Wireless, the claims were directed to “an improved user interface for computing devices,” and the improvement was creating a list of commonly accessed functions and data that could be accessed directly from a main menu. In Intellectual Ventures, the claims were directed to a “‘mobile interface’ on a user’s device” and improved on the prior art by “dislay[ing] a plurality of pointers to user-specific resources and information stored on the user’s various devices.” The fact that the claims in Core Wireless improved on the prior art by allowing information to be directly accessed from a main menu also invites comparison with the claims found ineligible in Apple v. Ameranth, which “claim[ed] systems including menus with particular features.”

Despite the Federal Circuit’s track record and the apparent similarity to the Intellectual Ventures and Apple cases, the Federal Circuit found that Core Wireless’ claims were patent eligible. Even more shocking, the Federal Circuit reached its finding because Core Wireless’ claims were not directed to an abstract idea, rather than because of any specific inventive contribution that might have distinguished the claims at issue in Intellectual Ventures and Apple. Accordingly, Core Wireless can arguably be treated as standing for the proposition that any “improved user interface for computing devices” should be treated as patent-eligible despite the contrary conclusion that might previously have been implied by Intellectual Ventures and Apple.

However, it may also be possible to draw lessons from Core Wireless that don’t implicitly treat the Federal Circuit as an arbitrary body whose panels capriciously use section 101 as a pretext for enacting their policy preferences without regard to law or logic. In concluding that Core Wireless’ claims were eligible, the Federal Circuit emphasized that the claims actually required a specific way of improving on the interfaces of the prior art. By contrast, when finding the claims in Intellectual Ventures and Apple ineligible, it emphasized that they failed to recite any particular way their improvements would be implemented. Accordingly, one way of understanding the Federal Circuit’s user interface eligibility cases as part of a consistent body of law is to treat the eligibility determination as turning on whether a claim recites a specific means for implementing an improvement, rather than just the improvement itself. This approach to harmonizing the interface eligibility cases not only has the benefit of not cynically treating the Federal Circuit as not acting in good faith, but it’s also consistent with explanations given of the results of non-interface cases such as McRO v. Bandai Namco and Finjan v. Blue Coat.

In context, Core Wireless is an impressive result. Not only does an interface patent survive an eligibility challenge, but the Federal Circuit explained its holding in a way that could bring a measure of coherence to the chaotic world of subject matter eligibility. If you’re of a more cynical bent, it could just be enough to BLOW YOUR MIND.

A version of this article with supporting citations is available here.

Like Shark Tank? Wish it had more patents?

I'm a big fan of the show Shark Tank, and am always amazed at how it takes an inherently dry process (investment due diligence) and turns it into entertainment. In this video, I take that entertainment, and graft my own commentary on the patent issues raised by the business being vetted: https://www.youtube.com/watch?v=N_Gn_so9y24. If you like Shark Tank, but wish it had more patents, this is definitely the video for you!

The effectiveness of incentives in changing patenting behavior

The first article in the BJHS December 2016 special issue (Authority and ownership: the growth and wilting of medicine patenting in Georgian England (hereinafter "Authority and Ownership")) describes a sudden rise and equally precipitous fall in the patenting of medicines in England in the mid eighteenth and early nineteenth centuries. Specifically, it describes how medicine patenting expanded in response to specific economic pressures - the emergence of a truly national market, and the concomitant increase in the importance of a patent as both a means of protection and a tool for legitimization.¹. It also describes how legal changes - judicial decisions tightening the disclosure requirements for a medicine patent² and, more importantly, the introduction of an excise stamp which could perform many of the same roles as a patent but was cheaper and easier to obtain³ - led to a corresponding downfall at the end of the period of study.

Reading through the article, I was struck by the responsiveness of patenting of medicine in Georgian England to the changes in incentives caused by the various legal and economic changes the article discusses. By contrast today, despite recent anti-patent changes such as the institution of post grant review proceedings in the AIA and the tightening of subject matter eligibility standards in Alice and Mayo, the number of patent applications filed per year has held roughly steady through the patent office's 2015 fiscal year.⁴ One reason for this potential difference in responsiveness? At the end of the period examined in the article, those who might otherwise have gotten a patent had a viable alternative in the form of an excise stamp. By contrast, today the policy changes which could serve to make patenting less attractive have not been accompanied by any alternative form of protection that would be patent holders could avail themselves of. As a result, because inventors today (like in Georgian England) are responsive to economic incentives, I predict that the current anti-patent policies will ultimately prove ineffective at changing behavior unless they are supplemented with some kind of alternative protection which could address the needs which inventors will otherwise look to have satisfied by the patent system (regardless of how hostile it becomes).

^1. Authority and Ownership at 553-54

The rise of medicine patenting was secondary to changes in the market for 'patent medicines' and their ownership in teh middle third of the eighteenth century. Helped by advertising in the expanding provincial press and improved communications, true national markets were created for several medicines, and the owners and wholesalers became more expert and specialized in supplying medicines across the country. ... So the participants in the industry had become more commercially aware, and they were probably seeking greater protection for their property. Also, selling medicines across the country needed better publicity and improved branding: both were enhanced by the authority of a royal patent.

^2. Authority and Ownership at 555

Lord Mansfield’s judgement in Liardet v. Johnson (1778) determined that the patentee should ensure that the specification was sufficient for a skilled tradesman to make the product without further experimentation after the patent had expired. This seemed to place the patentee under a positive obligation to provide useful information on the composition of the medicine. Once again, the specification was threatening the secrecy of a patented medicine, though several more legal judgments were required before the specification of patents became fully informative. By the end of the eighteenth century, an owner would be more concerned about the risks to the secrecy of his recipe posed by the specification than he would have been thirty years earlier.

^3. Authority and Ownership at 556

the major cause of the decline in medical patenting in the late eighteenth century was probably the introduction of the compulsory medicine excise stamp, another official device which could itself provide many of the benefits of the patent, but with much less expense and inconvenience.

^4. According to the patenting activities table in the patent office's 2015 performance and accountability report, there was a slight drop off in the number of patent filings from 2014-2015, and that the number of filings had increased in each of the preceding three years.

A new hope for inventors?

The Federal Circuit's recent opinion in Trading Technologies International, Inc. v. CQG, Inc., could be part of a broader trend signaling a liberalization of subject matter eligibility. As I wrote in an advisory with my colleague Doug Gastright, in that case, the Federal Circuit affirmed the lower court’s decision that the asserted patent claims, which covered a software invention relating to improved graphical user interfaces for electronic stock trading, were patent eligible subject matter. In handing down this opinion, the Federal Circuit designated it as being non-precedential, which is usually done when a decision “does not add significantly to the body of law.” However, notwithstanding the designation of this case as non-precedential, it should still be seen as noteworthy as it indicates that that the Federal Circuit may be coalescing around a relatively inventor-friendly approach to determining subject matter eligibility.

The change in approach which this case represents can be seen by contrasting it with the Federal Circuit’s initial opinions applying the Supreme Court’s decision in Alice v. CLS Bank to software inventions. In those early decisions, the Federal Circuit almost seemed poised to adopt a per-se rule that software-implemented inventions which solved business problems were not patent eligible. However, Trading Technologies not only made clear that there was no such per-se rule, it also demonstrated that an invention which solves a problem specific to a particular computer-enabled business context could be patent eligible even if it didn’t include any further inventive concept to limit the scope of its claims. This result was consistent with, and built on, several recent Federal Circuit cases dealing with software-implemented inventions, including Enfish LLC v. Microsoft Corp., which established that a software invention could be patent eligible even if didn’t include any additional hardware-based inventive concept, and Bascom Global Internet Services, Inc. v. AT&T Mobility LLC, which made clear that an invention which solved a business problem could be patent eligible if it was claimed in a manner which included an additional inventive concept. Accordingly, while non-precedential, the decision in Trading Technologies could be very useful as an inventor-friendly demonstration of how the Federal Circuit’s precedential decisions (e.g., Enfish and Bascom) should be applied.

The advisory I co-authored with Doug Gastright, which includes links to, and supporting citations from, the cases referred to above, is available here.

BJHS Special Issue on Patents

The December 2016 issue of the British Journal for the History of Science is a special issue titled Owning Health: Medicine and Anglo-American Patent Cultures, and reading through it has had the odd effect of making me simultaneously more disgusted with, and hopeful for, the U.S. patent system. The disgust is for the law as it is, as taking a historical view brings into sharp relief how inappropriate it is for cases like Association for Molecular Pathology v. Myriad Genetics, Mayo v. Prometheus and Alice v. CLS to graft 19th century anti-patent sentiment onto 21st century research and development. The hope is for the law as it is likely to be, as history also illustrates that the pressures which lead people to seek patent protection are deep-rooted and can ultimately sway even the most vociferous patent critics.

As it happens, I'm a firm believer in the much less quotable corollary to the saying "those who do not learn history are doomed to repeat it" - i.e., "those who do not learn history make the rules, and so we are all doomed to repeat it, but that repetition can be made less onerous by learning history so you have some idea of what comes next." Accordingly, throughout the month I'll be blogging the individual articles from the December 2016 BJHS special issue, I'll be blogging the individual articles from the December 2016 special issue, addressing not only what they say about the past, but also what I think they can tell us about the future.

One thing website operators MUST do under new DMCA rule

My colleague Melissa Kern wrote an advisory about the copyright office's final rule regarding designating a DMCA agent. I thought it was important enough to repost (with permission) here.

Beginning December 1, 2016, the Copyright Office is rolling out its new online filing system for designating an agent to receive notices of copyright infringement. Website operators and other online service providers who store user content must submit new designated agent information electronically before the deadline to continue to take advantage of the Digital Millennium Copyright Act’s (DMCA’s) safe harbor from copyright infringement liability.

The new online filing system replaces the interim, paper-based system that had been used since the DMCA was first enacted in 1998. Under the old system, service providers could designate agents by sending in paper forms to the Copyright Office, which the Copyright Office then scanned and publicly posted in its directory of agents. Previous filings made under the old, paper-based system will continue to meet the DMCA’s requirements until they are phased out on December 31, 2017.

In connection with its new online filing system, the Copyright Office has issued its Final Rule relating to designating an agent with the Copyright Office. Highlights are as follows:

• Beginning December 1, 2016, the Copyright Office will no longer accept paper agent designations. All new filings must be made electronically using the online filing system.
  
• All service providers who have previously filed with the U.S. Copyright Office for DMCA safe-harbor protection under the old, paper-based system will have until December 31, 2017 to refile using the online filing system or lose the safe harbor protection. To do this, the service provider, or its designee, must establish an account that will be used to log into the system and register.
  
• The DMCA filings will expire every three years, so they will need to be renewed. The Copyright Office’s new system will send out email reminders.
  
• Filing fees are significantly lower ($6 per entity). There is no limit to the number of alternative names, URLs, service names, software names, and other commonly used names that can be listed on a service provider’s filing for this fee. All alternative names that the public would be likely to use to search for the service provider’s designated agent must be provided. However, separate legal entities must file separately and are not considered alternative names.
  
• The designated agent does not have to be a natural person. Service providers now have the option to designate a specific person (e.g., Jane Doe), specific position or title of an individual (e.g., Copyright Manager), a department within the service provider’s organization or within a third-party entity (e.g., Copyright Compliance Department), or the service provider or third-party entity generally (e.g., ACME Takedown Service).
  
• The designated agent’s physical mail address, telephone number and email address must be provided to the Copyright Office, and a designated agent may now provide a post office box to be displayed as its physical address. However, in a nod to technological obsolescence, a fax number is no longer required.
  

Melissa's original advisory can be found here.

Photo credit from Flikr.com.