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USPTO Examples Show What Passes Under Alice

January 31st, 2015 Alexander No comments

The U.S. Patent and Trademark Office released a list of examples applying the U.S. Supreme Court’s Alice decision to hypothetical patents, which illustrates some of the computer-related inventions that can survive challenges under the ruling restricting the eligibility of patents involving abstract ideas.

The document includes eight examples: four inventions that are eligible for a patent under Alice and four that are not. Now, there some guidance of what the patent office is looking for.

Under Alice, abstract ideas implemented using a general-purpose computer are not eligible for a patent.

Many of the examples state that ways of performing long-standing business practices on a computer are not patent-eligible, while technological innovations dealing with the way a computer functions can pass.

For example, a method of providing a secure online sales transaction is not patent-eligible because it just a computerized way of creating a contractual relationship.

“This is simply a generic recitation of a computer and a computer network performing their basic functions,” the office wrote. “The claim amounts to no more than stating create a contract on a computer and send it over a network.”

However, a method of displaying multiple merchant websites within a single page, allowing Web users to visit several stores without leaving the page, was patent-eligible.

“The claim does not recite a mathematical algorithm; nor does it recite a fundamental economic or longstanding commercial practice,” the office said. “The claim addresses a business challenge (retaining website visitors) that is particular to the Internet.”

That theme runs through many of the examples, illustrating that in order to pass muster under Alice, inventions likely need to have a component that improves the functioning of a computer, rather than simply using a computer to make an existing process run more efficiently, said Donald Daybell of Orrick Herrington & Sutcliffe LLP.

The examples of things the USPTO found to be patent-ineligible tended to be much broader than those that were found eligible and involve things that had been done without a computer for a long time.

Nevertheless, the examination of any patent application is a fact-intensive inquiry, Daybell said, so the specific examples from the USPTO have a fairly limited practical value for determining whether any future application is patent-eligible or not. So even with this guidance, it’s tough for any practitioner to know where the line is drawn.

For more information, see Law360.

Categories: Intellectual Property


Patent Cases To Watch In 2015

January 6th, 2015 Alexander No comments

The U.S. Supreme Court will decide three patent cases involving claim construction, induced infringement and patent royalties in 2015, while the Federal Circuit grapples with the fallout from the high court’s recent patent-eligibility rulings and the standards for America Invents Act reviews.

Here are the patent cases attorneys will be watching in 2015:

Teva Pharmaceuticals USA Inc. v. Sandoz Inc.

The high court heard arguments in this case challenging the Federal Circuit’s rule that district court claim construction rulings must be reviewed afresh on appeal. If the justices discard that rule, it would mark a profound shift in patent law.

Teva is appealing a Federal Circuit decision invalidating its patents on the multiple sclerosis drug Copaxone after a district court found them valid. The company argues that claim construction, which is often dispositive in patent cases, involves factual findings that should be reviewed with deference on appeal.

The Federal Circuit has long held that claim construction is a question of law that must be reviewed de novo. As a result, it frequently reverses decisions by trial judges, and a Supreme Court decision requiring deference “could be a big, big change.”

Commil USA LLC v. Cisco Systems Inc.

The justices agreed to review a Federal Circuit decision that a defendant’s good faith belief that a patent is invalid can serve as a defense to induced patent infringement, in a case with significant implications for how difficult it is to prove inducement.

The ruling, which wiped out a $74 million damages award after a jury found that Cisco infringed a Commil wireless networking patent, created a defense to induced infringement that had never existed before.

The defense does not appear to have been used much since it was created, but that could change if it gets the high court’s blessing. It is easier for accused infringers to craft a defense that they believed a patent was invalid than to argue that they didn’t infringe. Permitting the defense would give another defense to inducement and make inducement harder to prove.

Kimble v. Marvel Enterprises Inc.

Also, the high court took on a case, in which it will review its own 50-year-old rule that royalty agreements cannot extend beyond the expiration of a patent, potentially opening the door to much longer licensing agreements.

The high court will consider an appeal by the inventor of a Spider-Man toy whose bid to collect royalties from Marvel Enterprises Inc. after his patent expired was denied by the Ninth Circuit.If the justices overrule that decision and end the ban on royalties for expired patents, “it will definitely make negotiations a bit more complicated and more interesting” by adding an entirely new aspect to licensing talks.

A win for the inventor may mean that licensees could conceivably end up paying royalties on patents in perpetuity, for a lower rate than they would currently pay during the limited life of the patent.

The case involves “a policy decision at the crossroads of antitrust and patent law,” DeVito said. “Antitrust cases have actually moved away from per se unenforceable rules, particularly in arms-length agreements where the parties have exercised their freedom to contract. This is a very important decision.”

Fallout from Alice and Myriad

While the justices busy themselves with new areas of patent law, the Federal Circuit, the Patent Trial and Appeal Board and the district courts will deal with the impact of the high court’s recent Alice and Myriad decisions on patent eligibility.

Many courts have cited those decisions to invalidate patents they say claim nothing more than abstract ideas or natural material.

“I call it the aftermath of Hurricane Alice,” Bart Showalter of Baker Botts LLP said. “Folks are very concerned about the scope of Alice. It’s a pretty fundamental case, and there is a concern among many companies that Alice has devastated a portion of their patent portfolio.”

In re: Cuozzo Speed Technologies LLC

By December, the Patent Trial and Appeal Board had issued just over 200 final written decisions in challenges to patents filed under America Invents Act proceedings. Although many have been appealed to the Federal Circuit, no appeals have yet been decided, and attorneys will be keeping tabs on how the court handles them and how often it upholds the board’s findings.

The court heard its arguments in an AIA case in November, and the decision in that appeal by Cuozzo could set important precedent on a key issue. Cuozzo argues that the board uses the wrong claim construction standard in reviews and should instead use the same standard as district courts, which makes it more difficult to invalidate patents.

If the court backs Cuozzo, the board would likely have to change the standard it issues in all future reviews. However the court rules, resolving the proper claim construction standard will make the system more stable.

“Clarity will be useful on either side,” he said. “It will make it more reliable for patentees and accused infringers.”