Enfish Decision Breathes New Life Into Computer-Implemented Patents

May 13, 2016 | Intellectual Property News
In the Supreme Court’s pivotal decision in Alice Corp. Pty. Ltd. v. CLS Bank, Int’l (2014), computer-implemented inventions were considered unpatentable if they were directed to an abstract idea. Since that time, many applications have been rejected and issued patents invalidated on the grounds that they were directed to an abstract idea and therefore contained unpatentable subject matter. In Enfish, LLC v. Microsoft Corporation (2016), the Federal Circuit Court of Appeals issued a clarifying decision that should stem the tide and provides an important clarification to support the patentability of many computer-implemented inventions. In setting up a two-stage inquiry for patentability of such inventions, the Supreme Court declared: “We must first determine whether the claims at issue are directed to a patent ineligible concept.” That formulation plainly contemplates that the first step of the inquiry is a meaningful one, i.e., that a substantial class of claims are not directed to a patent-ineligible concept. The “directed to” inquiry, therefore, cannot simply ask whether the claims involve a patent-ineligible concept, because essentially every routinely patent-eligible claim involving physical products and actions involves a law of nature and/or natural phenomenon—after all, they take place in the physical world. Rather, the “directed to” inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether “their character as a whole is directed to excluded subject matter.” The Federal Circuit then concluded that “We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract.” According to the formulation of Enfish, the issue should be determined by a close evaluation of the claims. As the Court held, “Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.” The patentability of computer-implemented inventions is still very much a case-by-case issue, but after the decision of Enfish there is once again room for pursuing such patents, particularly where the claims are written to be more particular to the specific functionality of the improvement, rather than generally to a broad or abstract idea that merely happens to be implemented on a computer.

Inventor’s Purchase Order to Supplier May Place Invention On Sale

August 15, 2013 | Intellectual Property News
The patent statutes provide that an invention cannot be patented when the inventor has placed the invention on sale more than a year before the filing date of the patent application. The so-called “on-sale bar” is clearly applicable when an inventor manufactures an item and sells it directly to others, but its application is less obvious when the inventor does not make or sell the item, and instead buys a quantity of it from a supplier. In a recent decision, the court held that the invention is on sale—and the patent will be barred—in such cases. The on-sale bar applies when two conditions are satisfied before the “critical date,” which is typically one year before the patent application filing date: (1) the claimed invention must be the subject of a commercial offer for sale; and (2) the invention must be ready for patenting. An invention is on sale when there is an offer to sell that is sufficiently definite that another party could make a binding contract by simple acceptance. An invention is “ready for patenting” when prior to the critical date: (1) the invention is reduced to practice; or (2) the invention is depicted in drawings or described in writings of sufficient nature to enable a person of ordinary skill in the art to practice the invention. In Hamilton Beach Brands, Inc. v. Sunbeam Products, the Federal Circuit Court of Appeals confirmed that there is no “supplier exception” to the on-sale bar. Hamilton Beach had issued a purchase order to a supplier for a specific quantity (in this case, 2000 units) of slow cookers in a document that included price, part number, quantity, and delivery dates. Because the communication was one that could be simply accepted, it was sufficient to place the invention on sale even though it was a sale to the inventor rather than from the inventor. The court left open the possibility that a lesser quantity might not trigger the on-sale bar, particularly where the nature of the purchase is a genuine experimental use rather than a commercial transaction. Nonetheless, it would be prudent to assume that a purchase from a manufacturer will trigger the on-sale bar, and therefore to file patent applications quickly enough thereafter to avoid the bar.

First to File, Other Patent Rules Effective March 16

February 28, 2013 | Intellectual Property News
The fist-inventor-to-file provision of the America Invents Act takes effect on March 16, 2013. After a long history of granting patents to the first applicant to invent an invention, the new law will now award a patent to the first applicant to file an application for the invention. Under the old system, an applicant faced with a rejection based on prior art could submit proof in the form of contemporaneous notes or the like to establish a date of invention earlier than that of the prior art reference. Because the system was focused on the first to invent, retaining good notes, prototypes, or other proof of the invention date was important. Under the new system, the invention date will no longer matter for priority purposes. Instead, the importance of the filing date makes it crucial to file an application at the earliest stage possible. There are many additional changes that accompany the migration to the first-to-file system, and surely too many to address fully in this account. As such, this report will highlight some of the more notable provisions of the new law. The new law also brings changes to the definitions of prior art and activities that will prevent an applicant from getting a patent. Under the old law, an applicant was barred from a patent if the invention was on sale more than a year before the patent application date. Judicial interpretations of the prior law concluded that almost any sale was a barring event, even if it was under a nondisclosure agreement and even if the buyer could not decipher the inventive subject matter. As one example, the use of a trade secret method to produce a product that is sold would place the method on sale even if the method was actually completely unknown to the public. The Patent Office’s current interpretation of the new law is that such private processes are not commercial uses available to the public. Consequently, it appears permissible to seek patent applications for such processes even if they have been used for many years—assuming, of course, that there is no other prior art lurking, and no other applicants who file applications first. Note that this interpretation is somewhat preliminary; although the Patent Office has adopted it for the purpose of evaluating patentability, the courts may disagree. Accordingly, there is risk in assuming that a privately conducted method, or a sale under an NDA, will not be a commercial event triggering the on-sale bar to patentability. Another change relates to the treatment of public disclosures that might bar patentability. Under the first-to-invent system, an applicant could defeat a publication showing that a third party had developed the same invention by submitting proof that the patent applicant invented the invention before the third party. Under the new first-to-file rule this is no longer allowable: if the same invention is available to the public, through a published document or otherwise, before the date of the application then the applicant will not be entitled to a patent. The key exception to this rule relates to public disclosures made by the applicant or derived from the applicant, which are not prior art against the applicant so long as the application is filed within one year of the disclosure. The Patent Office seems to intend to treat this exception very narrowly, and under its current examination guidelines the disclosure may still qualify as prior art unless it is essentially a verbatim copy of the patent applicant’s own work. If the public disclosure is a variation of the applicant’s work then it may be treated as prior art, thereby barring the patent from issuing. Given the risks involved in such publications, the best course is to file an application before any public disclosures. The first-to-file rules do not apply retroactively, and therefore do not apply to any applications filed prior to March 16, 2013. Likewise, the old rules related to prior art, commercialization, and public disclosures will still apply to such applications. Because the old rules may be preferable, most applicants will be better off if they file applications prior to March 16. For applications filed on or after that date, the applicability of either the new or old rules depends on the nature of the application. A request for continued examination for an application filed before March 16, 2013, as well as the filing of a national stage application for a pre-March 16, 2013 PCT application, will not subject the application to the new first-to-file rules even if the RCE or national stage application is filed after March 16. For applications filed on or after March 16, 2013, the application will be treated under the new first-to-file rules if the application contains even a single claim that has an effective filing date of March 16 or later. Thus, all new applications with no priority claims to prior-filed applications will be treated under the new rules. Likewise, any continuation in part application that includes one or more claims that rely on subject matter submitted after March 16, 2013 will also be treated under the new rules. Once such a claim is submitted in an application it is processed under the new rules for all time, even if the triggering claim is later canceled. The Patent Office is also raising its fees, effective March 19, 2013. While the Patent Office routinely raises its fees at least annually, in this case the increases are hefty. For example, a utility patent application previously required a small entity filing fee of $533 under the old rules, but will cost $730 under the new rules. For large entities, these basic filing fees increase from $1260 to $1600. A further change creates a new “micro entity” for filing purposes, with a micro entity being small entities with four or fewer prior patent applications, a gross income that does not exceed three times the national median household income, and has not granted rights in the invention to an entity with an income greater than three times the national median. For a micro entity, the basic filing fee is $400.

AIA Provisions Effective September 16, 2012

September 6, 2012 | Intellectual Property News
Certain aspects of the America Invents Act are effective beginning September 16, 2012. The key provisions include: Best Mode. The failure to disclose the best mode will no longer be a basis, in patent validity or infringement proceedings, on which any claim of a patent may be canceled or held invalid or otherwise unenforceable. Technically, however, the best mode still must be disclosed in the application. Derivation Proceedings. In a derivation proceeding an applicant for patent files a petition stating with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from the petitioner. The petition must be filed within 1 year of the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the invention. Inter Partes Reexamination. This process is no longer available after September 16, 2012. Inter Partes Review. A party may seek an Inter Partes Review of a patent within 9 months of issuance (or reissuance), or by the date of termination of a post grant review. The “inter partes” nature of the process means that the requester and the patent owner both participate in the process, and both can submit arguments related to patent validity. The review is limited to questions of novelty and obviousness, and carries a hefty fee of $27,200 in order to challenge up to 20 claims. The request must demonstrate a reasonable likelihood that the claims are invalid. During the proceedings, the parties may submit evidence and engage in limited discovery. Post Grant Review. A post grant review is a request that the patent office reconsider the validity of the patent; unlike the inter partes review, the requesting party does not participate after making the request. This request must be made within 9 months after the patent grant (or reissue), and can be based on grounds of novelty, obviousness, written description, enablement, and indefiniteness. As with all of the new review processes, it is expensive: $35,800 to review up to 20 claims. Prioritized Examination. A patent applicant can request expedited review of the application in which the Patent Office seeks to complete the process within one year. This request currently costs $4,800 for a large entity, and is limited to 10,000 such requests at the USPTO per year. Inventor’s Declaration. The declaration is still required, but is trimmed down. Under the new rule, the inventor is no longer required to (i) state that he/she is the first inventor of the claimed invention; (ii) state that the application filing is made without deceptive intent; or (iii) provide his/her country of citizenship. In addition, the declaration can be filed much later (up to a point just prior to a notice of allowance, though late charges still apply), and the declaration language can be contained in the assignment. Business Method Patent Challenge. For a limited time through September 16, 2020, business method patents may be challenged in a special form of review that will be substantially the same as the post grant review process but which allows the submission of a wider array of evidence. Preissuance Submissions. Anyone may submit prior art of interest to the patent office that may affect the patentability of an application, so long as it is submitted by the required deadlines, which generally extend until six months after publication, the issuance of a notice of allowance, or an office action rejecting the claims. Supplemental Examination. A patent owner may request supplemental examination to reconsider or correct aspects of the patent. The scope is much the same as a post grant review, and a key difference is that this is requested by the patent owner rather than a third party.  The patent office will consider up to 12 items of information, which are not limited to patents and printed publications. The filing fee is again quite large:  $21,260 for a large entity, though $16,120 of that is refundable if a substantial new question of patentability is found not to exist.

Senate passes patent reform bill

March 8, 2011 | Intellectual Property News
The Senate has passed a patent reform bill that would incorporate several significant changes including a first-to-file system, enlarged post-grant patent review procedures, and many others. Although the bill still faces challenges before being enacted into law, the Senate’s approval in a vote of 95 in favor and 5 opposed suggests a strong likelihood that much of this bill will ultimately be enacted. Among the more significant features are: First to file. The bill would end the long history in the United States of granting patents to the first to invent, rather than the first to file a patent application. Most other countries around the world follow a system in which patents are awarded to the first inventor to file a patent application even if another patent applicant could prove to have conceived it first. Grace period. Current law also allows inventors a one-year grace period between the time of any public disclosures of the invention and the date of the patent application. Under this grace period, public disclosures by anyone—whether by the inventor or any third party—do not work against the inventor as long as the inventor conceived of the invention before the public disclosures and the patent application is filed within a year of the disclosures. The patent reform bill would modify this grace period such that the inventor’s own disclosures do not bar patentability, but the application would not get the benefit of a grace period with respect to third party disclosures. False marking. The bill seeks to reduce the flood of false marking litigation by eliminating a provision allowing any member of the public to file such a lawsuit. Instead, only those who can prove to have suffered a competitive injury could assert a false marking claim. Willful infringement. Recent Federal Circuit Court of Appeals decisions have held that an infringer is liable for enhanced damages and attorneys’ fees if it was aware of the patent and was objectively reckless in proceeding with the infringing activity. The bill essentially codifies this prior law, adding that it must be shown by clear and convincing evidence and that close cases should be resolved against a finding of willfulness. Post grant review. The bill includes new provisions for “post-grant review” of patents, allowing the public additional mechanisms to challenge the propriety of the granting of a patent.

BLG prevails in inter partes reexamination; patent claims upheld

June 5, 2009 | Intellectual Property News
In a statistically rare event, BLG attorneys have achieved a decision upholding the patentability of the claims of a patent related to a laryngoscope for their client Verathon. After asserting the patent against others in litigation, an inter partes reexamination request was filed to challenge the validity of the patent. During the reexamination process, BLG submitted about 400 new claims for evaluation, securing the patentability of nearly all of them. On June 5, 2009, the USPTO issued a Right of Appeal Notice indicating that the vast majority of the claims submitted in reexamination were allowable. In more than 90 percent of inter partes reexamination cases, there are no claims that remain patentable. The success in this case is unusual among inter partes reexaminations, placing BLG client Verathon in a strong position to enforce its key technology related to video laryngoscopes.

BLG wins patent appeal in European Patent Office

January 1, 2009 | Intellectual Property News
BLG attorneys, together with associate counsel in the U.K., prevailed in a key opposition proceeding at the European Patent Office in a matter related to a laryngoscope patent owned by our client Verathon. In an important decision relating to this key video laryngoscope technology, the central claims of the patent were confirmed as being valid.