Is it Patentable?

Legal Analysis by Michael Kwun

Two months ago, in In re Bilski, the Federal Circuit rejected the notion that anything that produces a "useful, concrete, and tangible result" is potentially patentable. Instead, to be patent-eligible, an idea must be "tied to a particular machine or apparatus," or it must "transform a particular article into a different state or thing." (To qualify for a patent, it also has to meet various other requirements, such as being novel.)

As to transformation, the court noted that not just any transformation will do. The transformation "must be central to the purpose of the claimed process," and the "articles" transformed must either be "physical objects or substances" or "representative of physical objects or substances."

Today, in a one-paragraph decision in Classen Immunotherapies, Inc. v. Biogen IDEC, the Federal Circuit put those words into practice:

In light of our decision in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), we affirm the district court’s grant of summary judgment that these claims are invalid under 35 U.S.C. § 101. Dr. Classen’s claims are neither "tied to a particular machine or apparatus" nor do they "transform[] a particular article into a different state or thing." Bilski, 545 F.3d at 954. Therefore we affirm.

Here is a claim from one of the patents that was at issue:

1. A method of determining whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder in a treatment group of mammals, relative to a control group of mammals, which comprises:
    
• immunizing mammals in the treatment group of mammals with one or more doses of one or more immunogens, according to said immunization schedule, and
• comparing the incidence, prevalence, frequency or severity of said chronic immune-mediated disorder or the level of a marker of such a disorder, in the treatment group, with that in the control group.

The claimed method is not tied to a particular machine or apparatus, but surely "immunizing mammals" transforms particular articles. Why, then, isn't this patent eligible?

The key is that the immunizing of the mammals is not "central to the purpose of the claimed process." While of course the mammals must be immunized in order for someone to ascertain whether the immunization schedule used is effective, that immunizing isn't the point of the claimed invention. Rather, the invention is directed to analyzing the results of the immunizing. The immunizing itself is (to borrow more language from Bilski) "insignificant extra-solution activity" or merely a "data-gathering step" that cannot convert the claim into patentable subject matter.

(As an aside, this decision was issued as a "non-precedential" ruling, which means the judges did not think it added significantly to the body of law. The Classen patents reminded many patent practitioners of the patent in Lab. Corp. of Am. v. Metabolite Labs., Inc. [pdf], the 2006 case where the U.S. Supreme Court agreed to consider the scope of patent eligibility, but then dismissed for technical reasons. Perhaps the Classen judges concluded that even if the legal issue was significant in 2006, post-Bilski it was an easy call.)

It's good to see that the Federal Circuit is taking steps to ensure that the Bilski machine-or-transformation test has teeth, and cannot be avoided by mere artful drafting.

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Paper Catalog + Computer Database = Patent? Um, No.

Deeplink by Michael Kwun

Last week, the patent office agreed to reexamine a patent it granted in 1994 on a "Computer-assisted parts sales method." Orion IP (later renamed Clear with Computers) has filed many, many lawsuits asserting infringement of this and related patents by many, many defendants. Although EFF didn't file this request for reexamination, at one time the patent was owned by Firepond, just like one of the patents on our Patent Busting Project's Ten Most Wanted list.

So just what is this wonderful sales method? In a nutshell, the patent claims ownership over the idea of finding out what a customer wants, electronically finding out what you have that matches that customer's needs, electronically collecting information about the stuff you have to offer the customer, and putting that information into a pitch to the customer.

If you're thinking to yourself, "why that's no different than just looking things up in a catalog," you're not alone; while seeking a closely related patent, the very same applicant told the patent office, "The system essentially computerizes a parts book, with the exception that the system adds the unique element of customer benefits." (I tried, and failed, to figure out what the "unique element of customer benefits" refers to.)

Indeed, if you remove the word "electronically," the patent covers exactly what sales people have been doing for customers for ages. Unfortunately for the patent owner (and fortunately for the rest of us), saying "do it with a computer" does not an invention make.

(For those who want to look into this further, the patent being reexamined is Patent No. 5,367,627 and the control number for the reexamination is 90/010,185. And if you're curious what happens next in the reeexamination, take a look at the handy chart that appears as Appendix A to our white paper on improving patent quality via reexaminations.)

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When the Reese's Peanut Butter Cups Principle Doesn't Apply

Deeplink by Michael Kwun

When I was a kid, it seemed that every third commercial I saw was for Reese's Peanut Butter Cups. In these commercials, a chocoholic would collide with a peanut butter lover, quickly followed by the memorable exchange of "you got peanut butter in my chocolate" and "you got chocolate in my peanut butter." But then something amazing happened. Each of them sampled the combined treats, and their faces lit up with delight as they unexpectedly discovered "two great tastes that taste great together."

The converse is also true: When you combine previously known concepts and the result is utterly mundane, that's not a new invention. Moving peanut butter from glass jars to plastic tubs, for instance; it may be a new combination (peanut butter and plastic, hooray!) but it’s not a novel end product. A year ago, in the case KSR International Co. v. Teleflex Inc., the Supreme Court reminded everyone of just this fact. As the Court explained, "The combination of familiar elements according to known methods is likely to be obvious [and thus unpatentable] when it does no more than yield predictable results." At the time, a lot of people wondered whether this spelled the end for many lame patents that did little more than claim well-known business models recast as novel inventions by requiring that they be done on the Internet.

Less than two weeks after the KSR decision, the Federal Circuit picked up on the Supreme Court's hint in Leapfrog Enterprises, Inc. v. Fisher-Price, Inc. [PDF], invalidating as obvious a patent that simply applied modern electronics to old fashioned devices.

Earlier this month, the Federal Circuit directly applied this principle to the Internet. In Muniauction, Inc. v. Thompson Corporation [PDF], the court invalidated as obvious several claims of a patent describing a particular method of auctioning certain financial instruments on the Internet. These patent claims added nothing new to the prior art except that the patent claims required the use of a web browser, while an earlier system had used a proprietary computer network with specially designed client software.

The Federal Circuit noted that web browsers long predated the patent application's filing in 1998, and indeed that using web browsers in online auctions was well-known at the time. Recalling its prior reasoning in the Leapfrog case, the court concluded that "adapting existing electronic processes to incorporate modern internet and web browser technology" has been obvious for a long time.

The notion that one can obtain a patent on simply doing on the Internet what many did before without the Internet has seemed silly to many for a long time. Thankfully, the Federal Circuit agrees. Anyone want to celebrate with a Reeses?

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U.S. Patent Office Rejects All Ninety-Five NeoMedia Patent Claims

Deeplink by Michael Kwun

EFF's Patent Busting Project, continues to march forward, this time with more good news about the petition that EFF, in conjunction with Paul Grewal and James Czaja of Day Casebeer Madrid & Batchelder, filed last April seeking reexamination of the NeoMedia bar-code lookup patent. We're happy to report that the United States Patent and Trademark Office (PTO) recently rejected all ninety-five claims [5.3 MB PDF] of the patent.

The PTO agreed to take another look at the patent last October after EFF filed a petition for ex parte reexamination that called to the PTO's attention a wealth of prior art that the PTO had not previously considered and that showed that the NeoMedia patent claims were not novel. After consideration of the prior art EFF submitted, the PTO found that none of the ninety-five claims in the NeoMedia patent should have been allowed.

Now that the PTO has agreed with us that the patent claims weren't novel, NeoMedia is in the difficult position of trying to explain what was so inventive about its ideas, in light of the prior art that EFF highlighted. Alternatively, NeoMedia can try to amend its claims to narrow them, and argue that the narrower claims were non-obvious, even if the original claims weren't.

(By the way, the PTO's rejection is merely the latest bad news for the NeoMedia patent. After the PTO agreed to reexamine the patent, NeoMedia agreed to put on hold its pending litigation against Scanbuy [PDF], in which NeoMedia is alleging of infringement of the bar-code lookup patent, as well as another patent.)

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Wanted: Prior Art to Bust Seer Patent

Deeplink by Emily Berger

The Patent Busting Project fights back against bogus patents by filing requests for reexamination against the worst offenders. We've successfully pushed the Patent and Trademark Office to reexamine five of the ten patents on our Most Wanted list. We're proud to have tackled half of the list, but now we need your help to bust another.

A company called Seer Systems has a patent on a system for joining different musical data types together in a file, distributing them over the internet, and then playing that file.

We are especially interested in prior art relating to downloading and playing parts of "musical work files" in real time. One such example might be a system for streaming media files by taking the file one piece at a time and downloading the necessary sound files and musical data for that part before playing it and moving on to another section.

The Seer Systems patent was filed on July 11, 1997. We need to show that information on how to make the system described in the patent was publicly available before that date. Prior art can be in the form of a published patent, a printed publication (such as a web page, newsgroup post, public presentation, magazine article, or technical paper), a product manual, or literature related to a product or its sale. Publicly available software that was distributed before the filing date and that demonstrated the functionalities described in the patent may also be used as prior art.

Take a look at the description and please forward it to anyone you know who might have special knowledge related to digital music sequencing. Prior Art can be submitted here.

We anticipate that a lot of useful prior art will lie in the area of digital music sequencing software and systems, whether for music composition or playback.

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The Patent Office Can’t Do It All Alone: Public Participation Is Key to Ensuring Patent Quality

Deeplink by Emily Berger

It’s not news that there are patents out there that never should have been granted. Whether it’s the “invention” of entertaining a cat with a laser pointer, combining two well-known car features in a manner that offers no unexpected new outcome, or selling CDs of a live concert immediately after the show, the patent office allows some bad patents.

Our Patent Busting Project takes this problem on by asking the patent office to “reexamine” patents – that is, to consider again whether those patents should have been issued in the first place in light of prior art (ideas that existed before the patents) that we’ve located and brought to the patent office’s attention.

And in March, while the Patent Reform Act was still on the Senate’s schedule, we commented on the value of one form of reexamination known as an “ex parte” reexam (the only form of reexamination available for older patents) and provided some statistics. Dennis Crouch, who maintains a blog on patent law read by much of the patent law community, also recently evaluated ex parte reexaminations and provided some nice demonstrative graphs.

The data shows that in over three-fourths of ex parte reexaminations, the patent examiners narrow or cancel the patent claims in question, meaning that the prior art introduced during reexam usually has a dramatic effect on the scope of the patent. On inter partes reexamination (a newer type of reexamination in which the party seeking reexamination is allowed to play a greater role), many of the patents end up completely obliterated -- 64% of all such reexamination requests resulted in canceling the claims altogether. When patent claims that aren’t actually novel are canceled, the patent owner can no longer exclude others from making, using, or selling something that he never invented. And when patents do teach novel ideas but were written with too broad of a scope, narrowing those claims can prevent meritless claims of patent infringement.

EFF is releasing a report finding that there are at least three ways to work toward improving patent quality, including through reexamination:

1. Encourage Organized Efforts to Have a More Thorough Review of Patent Applications

• Increase third party efforts to improve prior art searches and to facilitate a stronger understanding of the world of prior art.

2. Support Organized Efforts After Patents Have Been Issued

• Reexaminations should be limitless in time and with no financial harm limitations (in many countries, public interest organizations like EFF are only allowed to challenge issued patents for a short period of time after they have issued, even though often a patent’s threat to innovations may not be immediately obvious).

• Don't Streamline. Maintain a variety of options for reexamination requesters.

3. Increase Access to Information in the Patent Office

• Update information in the patent office’s online databases regularly.

• Conduct and publish regular evaluations of effectiveness and performance within the Patent Office.

In addition to providing an organized effort through the Patent Busting Project in furtherance of the second goal, EFF is working in conjunction with Mozilla, Yahoo, and the Internet Archive to create a database that will work to achieve the first goal. This Prior Art project is still under development.

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Supreme Court Victory for Patent First Sale Doctrine

Deeplink by Fred von Lohmann

The Supreme Court today issued a unanimous opinion in Quanta v. LG Electronics, its first ruling in 66 years addressing the patent exhaustion doctrine. Patent exhaustion is the patent law equivalent to copyright law's first sale doctrine -- once you buy a product, you own it and the patent owner generally can't interfere with your subsequent use. EFF filed an amicus brief on behalf of itself, Consumers Union, and Public Knowledge in the case.

Today's ruling was relatively narrow in scope, but what news there is, is good. The case involved an effort by the patent owner, LG Electronics, to sue Quanta for patent infringement. Quanta, for its part, had purchased patented chipsets from Intel, which was authorized by LG to manufacture and sell the chipsets. Huh, you may ask -- how can Quanta be a patent infringer when it purchased perfectly legit chipsets from a perfectly legit, licensed manufacturer? LG argued that its license only reached Intel, not its customers. Moreover, LG required Intel to give customers a "notice" that explicitly said as much. This is exactly the kind of downstream "double-dipping" that the patent exhaustion doctrine was meant to prevent (for more on this, read the EFF-CU-PK amicus brief).

The Supreme Court today ruled against LG Electronics. So the upshot is a victory for the principle of "you bought it, you own it:" a mere unilateral notice to customers is not enough to prevent a patent from being exhausted upon first authorized sale. This should help consumers who purchase patented (and copyrighted) products festooned with "single use only" and "not for resale" notices rest a bit easier. Today's ruling suggests that those kinds of notices, too, would have no force under patent law.

Unfortunately, the Court did not take the opportunity to issue a broad ruling on whether other sorts of labels, or licenses, or contracts might be enough to defeat the patent exhaustion doctrine. So the Court's ruling leaves the door open for patent owners to experiment with these tactics, all in a continuing effort to transform purchases into "conditional sales" and stick consumers with restrictions on post-sale activities, such as resale (as we've seen in cases like UMG v. Augusto and Vernor v. AutoDesk in the copyright context), reuse (as we've seen in the case involving Lexmark's "not for refill" printer cartridges), repair, and modification, among other things.

Forecast: more litigation and, someday, another trip to the Supreme Court to face the issue squarely.

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Patent Reform Act Stalls in the Senate

Deeplink by Emily Berger

Coauthored by EFF Activist Richard Esguerra

The progress Congress was making on the Patent Reform Act (S. 1145) has stalled and Senate Majority Leader Harry Reid has pulled the bill from the floor schedule.

The lack of progress is disappointing. Despite its flaws, the proposed legislation would make important and necessary changes to the patent law. In particular, the bill would limit damages for infringement so that they bear some relationship to the actual value of the damage to the patent owner.

S. 1145 would also have clearly defined situations in which defendants would be liable for willful infringement, which can result in treble damages for the losing party. Until the recent Federal Circuit Court of Appeals decision in In re Seagate Technology, the law allowed defendants to be found liable for willful infringement if they merely knew of the existence of the patent. As a result of that case, enhanced damages are now only available for willful patent infringement that is at least "objectively reckless."

One of the basic goals of the patent system is to get inventors to reveal the secrets of their technology — in published patent applications — so that others could build on it. The low threshold for a finding of willfulness, coupled with the threat of treble damages, chilled innovation by discouraging competitors from even reading each other's patents. In addition, many companies, especially small businesses, preferred to license patents of questionable validity rather than risk litigation.

The Wall Street Journal reported that negotiations between Senate Judiciary Committee members stalled over changes in the way damage awards would be made in patent infringement suits. Intellectual Property Watch also suggests that a political fight over the confirmation of federal judges may have played a role in the postponement.

At least the troubling portion of the draft committee report on post-grant review and third-party reexamination — the process by which the EFF Patent Busting Project fights bogus patents — is now off the table. Third-party reexamination allows organizations like EFF to protect the public interest, so we actively sought, with the community's help, to retain the procedures that provided for reexamination practice.

There's no schedule for when the bill will return. Most sources are reporting that the bill is not dead, but it appears that the committee members will have to resolve their differences before patent reform is to continue. Encouragingly, the committee chairman, Senator Leahy, expressed a strong interest in following through, saying in a statement: "Thousands of hours have been spent in negotiations to address the concerns of 100 Senators, hundreds of Representatives, and dozens of stakeholders. [...] I have said repeatedly that the time for patent reform is now. Unfortunately, some have yet to fully grasp this fact, and have stalled meaningful reform."

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Reexamination Improves Patent Quality: A Look at the Latest USPTO Filing Data

Deeplink by Emily Berger

Coauthored by Policy Intern Raeanne Young

The latest statistics [PDF] from the Patent and Trademark Office prove what EFF has been saying for years: third party challenges to patent validity provide an invaluable check on improper and overbroad patents. According to these records, in the 25 years since ex parte reexamination became possible, the PTO has granted the vast majority of reexamination requests. In other words, the PTO found that the third party challenge raised substantial new questions of patentability. Thus, rather than overburdening the examiners, reexamination requests are helping the PTO separate the wheat from the chaff, fix mistakes and meet its stated goal: to promote innovation.

Since the start of ex parte reexamination in 1981, there have been over nine thousand requests that the PTO revisit issued patents, averaging over five hundred annually in recent years. From 1981 through the end of 2007, the Office of the Patent Commissioner has granted over ninety percent of these ex parte reexamination requests. Out of the eight thousand requests that have been granted since the start of ex parte reexamination, six thousand and sixty resulted in a narrowing of claims. In other words, the PTO grants 92% of the reexamination requests it receives, and in 3 out of 4 of those cases, the requests are having a substantial effect on the claims.

This data demonstrates how reexamination can help limit the impact of illegitimate patents on the public domain. With the PTO reworking 3 out of 4 patents in reexamination and often revoking the entire patent, these proceedings are clearly essential to the PTO’s continuing ability to pursue high patent quality.

Unfortunately, the success of ex parte reexamination proceedings is being overlooked by the latest draft of S.1145, the Patent Reform Act of 2007, which is raising some serious concerns about the ability of the PTO to continue to ensure good patent quality. As we recently reported, the latest draft of the Patent Reform Act of 2007 replaces the current reexamination processes with an inadequate form of post-grant review and places undue restrictions on third party participation. This portion of the Act could essentially eliminate important public interest projects, such as EFF's Patent Busting Project which uses inter and ex parte reexamination proceedings to challenge patents that endanger the public domain. The PTO recently granted EFF's fifth patent reexamination request.

EFF is working to gather more information about recent patent reexamination proceedings and other public interest efforts to control patent quality through the reexamination process. If you have information that could be helpful, please contact patent@eff.org. To keep third party reexamination as a component of the Patent Reform Act, take action now.

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Wanted: Prior Art to Bust Firepond/Polaris Patent

Deeplink by Emily Berger

The Patent Busting Project fights back against bogus patents by filing requests for reexamination against the worst offenders. We've successfully pushed the Patent and Trademark Office to reexamine four of the ten patents on our Most Wanted list, and now we need your help to bust another.

A company called Polaris has a patent on a method for telling whether or not an incoming message (e.g., an email) is a simple, standard request that can be answered automatically, and, if so, for answering it. The method processes incoming messages by consulting two databases: a database of IF-THEN rules, and another database of previously classified messages (cases). In other words, Polaris claims to have invented the basic concept of almost any technology that is used to determine whether the message can be answered automatically or must instead be forwarded to a human being.

To bust this overly broad patent, we need to find prior art that describes a product made before 1997 in this way. Take a look at the description and please forward it to anyone you know who might have special knowledge related to natural language processing. Prior Art can be submitted here.

We anticipate that a lot of useful prior art will lie in the area of helpdesk automation or customer service automation or in server software. Consider specifically:

• Helpdesk automation systems that automatically respond to user queries or
• Systems that help customer service operatives identify solutions to user problems by means of both rule and case databases.

Where to send information on prior art:
Email: priorart@eff.org
Web submissions: http://w2.eff.org/patent/wanted/contribute.php?p=firepond

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