Comments onComments on “Claimable Aspects of “Claimable Aspects of Software-Implemented Software-Implemented

Business Methods” Business Methods” by Professor Andrew Chinby Professor Andrew Chin

Margo A. BagleyMargo A. BagleyAssociate Professor of LawAssociate Professor of Law

Emory University School of LawEmory University School of LawAtlanta, GeorgiaAtlanta, Georgia

Key Insights from “Claimable Key Insights from “Claimable Aspects”Aspects”

1.1. Identifying differences between formal and Identifying differences between formal and informal claims treated the same by pending informal claims treated the same by pending legislationlegislation

2.2. Anomalous higher patentability standard for Anomalous higher patentability standard for formal claimsformal claims

3.3. Potential for obtaining true monopoly, more Potential for obtaining true monopoly, more valuable patents via informal or “essential use” valuable patents via informal or “essential use” (“EU”) claims(“EU”) claims

Potential IssuesPotential Issues

Enhanced Patent ValueEnhanced Patent Value

Business Method or Business Business Method or Business Idea?Idea?

EU claim can encompass an entire EU claim can encompass an entire software product marketsoftware product market

Not limited to any particular Not limited to any particular implementation methodimplementation method

““Method” is at such a high level of Method” is at such a high level of abstraction, appears to be a claim to abstraction, appears to be a claim to an ideaan idea

Business Method or Business Business Method or Business Idea?Idea?

““The laws of nature, physical phenomena, and The laws of nature, physical phenomena, and abstract ideas have been held not patentable. abstract ideas have been held not patentable. . . . Thus, a new mineral discovered in the . . . Thus, a new mineral discovered in the earth or a new plant found in the wild is not earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein patentable subject matter. Likewise, Einstein could not patent his celebrated law that could not patent his celebrated law that E=mc2; nor could Newton have patented the E=mc2; nor could Newton have patented the law of gravity. Such discoveries are law of gravity. Such discoveries are ‘manifestations of . . . nature, free to all men ‘manifestations of . . . nature, free to all men and reserved exclusively to none.” and reserved exclusively to none.” Diamond v. Diamond v. ChakrabartyChakrabarty (USSC 1980) (USSC 1980)

Business Method or Business Business Method or Business Idea?Idea?

““The emphasis on the commercial The emphasis on the commercial function of the program . . . together function of the program . . . together with the complete generality of the with the complete generality of the hardware and software elements . . . hardware and software elements . . . leads to the conclusion that this is a leads to the conclusion that this is a patent on the patent on the business ideabusiness idea of using of using computers, in particular the Internet, computers, in particular the Internet, to price and purchase options on to price and purchase options on airline tickets.” airline tickets.” Prof. R. Merges (discussing Prof. R. Merges (discussing Priceline.com’s airline ticket auction patent)Priceline.com’s airline ticket auction patent)

Business Method or Business Business Method or Business Idea?Idea?

Some abstract ideas are now Some abstract ideas are now patentablepatentable

Consistent with ever-expanding Consistent with ever-expanding scope of patent-eligible subject scope of patent-eligible subject mattermatter

Prosecution Issues with EU Prosecution Issues with EU ClaimsClaims

Enablement, written descriptionEnablement, written description Prior ArtPrior Art

Sample “1-Click” EU ClaimSample “1-Click” EU Claim

A method of allowing a user to purchase an item, A method of allowing a user to purchase an item, comprising: comprising:

Displaying the item to a purchaser;Displaying the item to a purchaser; Allowing the purchaser to identify himself or herself;Allowing the purchaser to identify himself or herself; Allowing the purchaser to order the item;Allowing the purchaser to order the item; Receiving a request from the purchaser to identify himself Receiving a request from the purchaser to identify himself

or herself and to order the item, wherein only one or herself and to order the item, wherein only one purchaser action is required to cause the request to be purchaser action is required to cause the request to be received; received;

Retrieving previously stored information regarding the Retrieving previously stored information regarding the purchaser;purchaser;

Generating a purchase order; andGenerating a purchase order; and Fulfilling the purchaser order. Fulfilling the purchaser order.

Sample “1-Click” EU ClaimSample “1-Click” EU Claim

More likely to be obvious in view of More likely to be obvious in view of analogous “real world” transactions, analogous “real world” transactions, for example,for example, frequent hotel guestfrequent hotel guest regular customer in informal storeregular customer in informal store

Enhancing Patent Value?Enhancing Patent Value?

EU’s allow functional claiming EU’s allow functional claiming without the limits of 35 U.S.C. 112, without the limits of 35 U.S.C. 112, p6 p6 Not limited to means disclosed in the Not limited to means disclosed in the

specificationspecification Broader claims (easier to infringe)Broader claims (easier to infringe)

Enhancing Patent Value?Enhancing Patent Value?

EU claims more likely to be infringedEU claims more likely to be infringed Claims are functional, cover plethora of Claims are functional, cover plethora of

implementation formsimplementation forms Not limited to disclosure in specificationNot limited to disclosure in specification Easier to establish literal infringementEasier to establish literal infringement Need not resort to Doctrine of Need not resort to Doctrine of

EquivalentsEquivalents

Enhancing Patent Value?Enhancing Patent Value?

Non-Structural Barriers to Entry:Non-Structural Barriers to Entry: sticky features may give an advantage sticky features may give an advantage

to first entrant:to first entrant: Customer resistance to learning new Customer resistance to learning new

interfaceinterface Customer reluctance to re-enter personal Customer reluctance to re-enter personal

data on a new sitedata on a new site

ConclusionConclusion

EU claims can enhance patent value EU claims can enhance patent value and create a true monopoly if issues and create a true monopoly if issues of enablement, prior art can be of enablement, prior art can be overcome. EU claims have additional overcome. EU claims have additional benefits in infringement analysis and benefits in infringement analysis and may enable creation of non-structural may enable creation of non-structural barriers to entry. However, EU claims barriers to entry. However, EU claims seem more likely to stifle innovation.seem more likely to stifle innovation.