Bilski: Effect on patentability of Software and Business Method patent applications, By Arun...

10 December, 2008 1

Bilski: Effect on software and business method applications

by, arun k narasani

10 December, 2008 2

Agenda

Background Bilski Case BPAI Decisions Summary

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BACKGROUND

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Patent eligible subject matter

35 USC 101 Process Machine Manufacture Composition of matter

or Any new and useful improvement

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Patent eligible subject matter

Diamond v. Chakrabarty (1980) Subject matter is intended to be broad Exclusions include laws of nature, natural

phenomena, abstract ideas

Diamond v. Diehr (1981) Process with steps including use of mathematical

formula/algorithm Mere use of a formula in an otherwise patent

eligible subject matter does not make it patent ineligible

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BILSKI Case

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Case details

US application 08/833,892: ClaimA method for managing the consumption risk costs of a commodity sold by

a commodity provider at a fixed price comprising the steps of:

(a) initiating a series of transactions between said commodity provider

and consumers of said commodity wherein said consumers

purchase said commodity at a fixed rate based upon historical

averages, said fixed rate corresponding to a risk position of said

consumer;

(b) identifying market participants for said commodity having a counter-

risk position to said consumers; and

(c) initiating a series of transactions between said commodity provider

and said market participants at a second fixed rate such that said

series of market participant transactions balances the risk position

of said series of consumer transactions

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Case details

Patent originally rejected by Examiner BPAI rejects the original objection as

“erroneous” Examiner used “technological arts” test which is

irrelevant Specific apparatus was not required for patent

eligibility. Ex. Chemical reaction

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Case details: considerations

Validity of a claim “is a matter of both claim construction and statutory construction”

No claim construction dispute

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Case details: considerations

What is patent eligible process? Supreme court has held that “process” as used in

§101 is narrower than its ordinary meaning (See Flook)

Claim is not patent eligible “process” if it claims “laws of nature, natural phenomena, [or] abstract ideas” (Diamond v. Diehr)

What is an abstract idea? Is applicant claiming a fundamental principle

(an abstract idea) or a mental process?


Revisiting patent eligible subject matter

Freeman-walter-Abele test In re freeman (1978); In re walter (1980); In re

abele (1982) Rejected in In re Alappat (1994)

Useful-concrete-tangible test State Street Bank v. Signature Financial Group

(1998), "Data Processing System for Hub and Spoke Financial Services Configuration"

Technological arts test


Machine-or-Transformation test

1. Tied to a particular machine, or 2. Involves transformation of an article Further restrictions:

Should “not pre-empt all uses of a fundamental principle”

“insignificant extra-solution activity” will not suffice

Purpose: to preclude processes which pre-empt “all uses of a fundamental principle” from being patent eligible


Machine Implementation

Left ambiguous “We leave to future cases the elaboration of the

precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.”


Transformation

“A claimed process is patent-eligible if it transforms an article into a different state or thing. This transformation must be central to the purpose of the claimed process”

Articles: Do not include: Abstract constructs such as legal

obligations, organization relationships, and business risks

Include: electronic data of a physical objects or substances (See Abele)


Case details: verdict

Claims patent ineligible as they are neither tied to any particular machine nor transforming any article from one state to another


Case details: clarifications

Business methods are not excluded from patent eligible subject matter

Software is not excluded from patent eligible subject matter


Case details: clarifications

“even a claim that recites "physical steps" but neither recites a particular machine or apparatus, nor transforms any article into a different state or thing, is not drawn to patent-eligible subject matter.”

“Conversely, a claim that purportedly lacks any "physical steps" but is still tied to a machine or achieves an eligible transformation passes muster under § 101.”


Effect on software and business method applications

Are pure business method patents out of patent eligible subject matter?

Is US also moving towards “Software Per Se” exclusion like in India?


POST-BILSKI: BPAI Decisions


Ex parte BO LI (BPAI), 6 Nov, 08

Claim 42 rejected under §101:A computer program product, comprising a computer usable medium having a computer readable program

code embodied therein, said computer readable program code adapted to be executed to implement a method for generating a report, said method comprising:

providing a system, wherein the system comprises distinct software modules, and wherein the distinct software modules comprise a logic processing module, a configuration file processing module, a data organization module, and a data display organization module;

parsing a configuration file into definition data that specifies: a data organization of the report, a display organization of the report, and at least one data source comprising report data to be used for generating the report, and wherein said parsing is performed by the configuration file processing module in response to being called by the logic processing module;

extracting the report data from the at least one data source, wherein said extracting is performed by the data organization module in response to being called by the logic processing module;

receiving, by the logic processing module, the definition data from the configuration file processing module and the extracted report data from the data organization module; and

organizing, by the data display organization module in response to being called by the logic processing module, a data display organization of the report, wherein said organizing comprises utilizing the definition data received by the logic processing module and the extracted report data received by the logic processing module.


Ex parte BO LI (BPAI), 6 Nov, 08

BPAI applied the new machine-or-transformation test as opposed to the “useful, concrete, tangible” used by the examiner

BPAI decided that ““Beauregard claim” of this nature be considered statutory at the USPTO as a product claim”

Beauregard claims are still valid post Bilski


Ex parte Godwin and Wanderski,13 Nov, 08 (Rehearing)

Claim 7 rejected under §101:

A portal server system comprising:

a portal coupled to a plurality of portlets, each of said portlets having associated portlet rendering logic;

a portlet aggregator communicatively linked to said portlet rendering logic; and,

a visual service extension to said portlet aggregator programmed to process said portlet rendering logic to transform visual style attributes in said portlet rendering logic into markup language tags which can be rendered for display in a specified type of pervasive agent.


Ex parte Godwin and Wanderski,13 Nov, 08 (Rehearing)

Issue considered: Have Appellants shown that the claimed invention recited in claims 7 and 12 is not directed to software per se?

application: “The present invention can be realized in hardware, software, or a combination of hardware and software.”

“As per our discussion above, in the context of a software embodiment, we maintain that a server is broadly but reasonably interpreted as a provider of services.”

“it is our view that independent claims 7 .. do not positively recite implementing the invention on a specific apparatus.”


Ex parte Halligan and Weyand,24 Nov, 08

Claim 119 rejected under §101:119. A programmed computer method based upon the six factors of a trade secret from the First

Restatement of Torts for identifying trade secrets within a plurality of potential trade secrets of a business, where each of the plurality of potential trade secrets comprise information, said method implemented by the programmed computer to effect the following steps:

a) the programmed computer providing a predetermined criteria for evaluating a potential trade secret of the plurality of potential trade secrets under each of the six factors of a trade secret from the First Restatement of Torts, said six factors including (1) the extent to which the information is known outside of the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the business to guard the secrecy of the information; (4) the value of the information to the business and its competitors; (5) the amount of time, effort or money expended by the business in developing the information and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others;

b) the programmed computer receiving a numerical score value for the potential trade secret under the predetermined criteria for each of the six factors;

c) the programmed computer calculating a metric from the received numerical score values under the six factors; and

d) the programmed computer determining that the potential trade secret is a trade secret when the calculated metric exceeds a predetermined threshold value.


Ex parte Halligan and Weyand,24 Nov, 08

Method is performed using an unspecified algorithm

No physical object or data relating to physical object is being transformed

“..recitation fails to impose any meaningful limits on the claim's scope as it adds nothing more than a general purpose computer that has been programmed in an unspecified manner to implement the functional steps recited in the claims.”


Summary

General Business methods without any relation to real world objects go out of window

Software is still patentable Beauregard claims are allowed Software claims without structural limitations may

not go through Need to be careful about general disclaimers Provide definitions to words in claims to indicate tie

up to a “particular machine”


QUESTIONS?

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