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Patent Eligible Subject Matter and High Tech Inventions

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Knobbe attorneys presented "Patentable Eligible Subject Matter and High Tech Inventions" at a recent seminar held in Japan.

Knobbe attorneys presented "Patentable Eligible Subject Matter and High Tech Inventions" at a recent seminar held in Japan.

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  • 1. Patent Eligible Subject Matter and High Tech Inventions Eric Nelson October 19, 2012 TokyoThe recipient may only view this work. No other right or license is granted. knobbe.com
  • 2. Introduction to Patentable Subject Matter • §101 sets the standard for patentable subject matter • 35 U.S.C. § 101: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor....” • Contains an implicit exception: “laws of nature, natural phenomena, and abstract ideas” are not patentable© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2
  • 3. §101 Issues for High Tech Inventions How do you know you are here? Systems and And not Methods here? Abstract Mathematical Ideas Algorithms Or here?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 3
  • 4. Trends in High Tech Cases and §101 Lourie Prost Wallach Linn O’Malley RadarBancorpCLS Bank ?UltramercialDealertrackResearch Corp.In re FergusonCybersourceFort PropertiesBilski ?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 4
  • 5. Trends in High Tech Cases and §101 Dyk Plager Newman Mayer Schall Moore BrysonBancorpCLS BankUltramercialDealertrack ?Research Corp.In re Ferguson ?CybersourceFort PropertiesBilski ? ?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 5
  • 6. §101 – A Closer Look at Recent Cases • CLS Bank Int’l v. Alice Corp. (Fed. Cir. July 9, 2012) • Bancorp Servs. L.L.C. v. Sun Life Assurance Co. of Canada (U.S.) (Fed. Cir. July 26, 2012)© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 6
  • 7. CLS Bank Int’l v. Alice Corp. (Fed. Cir. July 9, 2012)– System Claims • A data processing system … comprising: – a data storage unit having stored therein information about a shadow credit record and shadow debit record for a party … and – a computer, coupled to said data storage unit … configured to • (a) receive a transaction; • (b) electronically adjust said shadow credit record and/or said shadow debit record … allowing only those transactions that do not result in a value of said shadow debit record being less than a value of said shadow credit record; and • (c) generate an instruction … at the end of a period of time to adjust said credit record and/or said debit record in accordance with the adjustment of said shadow credit record and/or said shadow debit record.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 7
  • 8. The Federal Circuit • The Supreme Court “did not directly address how to determine whether a claim is drawn to an abstract idea” – Preemption – the extent to which preemption forecloses innovation – Machine and transformation© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 8
  • 9. The Federal Circuit • “It is fundamentally improper to paraphrase a claim in overly simplistic generalities in assessing whether the claim falls under the limited ‘abstract ideas’ exception” • “Nothing in the Supreme Court’s precedent … allows a court to go hunting for abstraction by ignoring the concrete, palpable, tangible, and otherwise not abstract invention the patentee actually claims”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 9
  • 10. The Federal Circuit • Does the computer play a significant part in permitting the claimed method to be performed? – “It is difficult to conclude that the computer limitations … do not play a significant part in the performance of the invention or that the claims are not limited to a very specific application of the concept.” • “The limitations requiring specific ‘shadow’ records leave broad room for other methods of using intermediaries to help consummate exchanges … and, thus do not appear to preempt much in the way of innovation”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 10
  • 11. The Federal Circuit • “A claim that is drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than the idea of doing that thing on a computer may not”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 11
  • 12. Bancorp Servs. L.L.C. v. Sun Life Assurance Co. of Canada (U.S.) (Fed. Cir. July 26, 2012)9. A method for managing a life insurance policy on behalf OTHER CLAIMSof a policy holder, the method comprising the steps of: • Additional Independent claims similar in scope generating a life insurance policy including • Claim 17: steps “performed by a computer”a stable value protected investment with an initial valuebased on a value of underlying securities; calculating fee units for members of amanagement group which manage the life insurancepolicy; ...andone of the steps of: removing the fee units for members of themanagement group which manage the life insurancepolicy, and accumulating fee units on behalf of themanagement group. © 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 12
  • 13. Federal Circuit – Patent Eligibility • Court looks to “underlying invention for patent- eligibility purposes.” CyberSource Corp. v. Retail Decisions, Inc. • “Format of the various method, system, and media claims [does] not change the patent eligibility analysis under § 101.” CLS Bank Int’l v. Alice Corp. • “To salvage a patent ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not.” SiRF Tech. v. ITC.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 13
  • 14. Federal Circuit – Affirms • Computers used to merely track, reconcile, and administer a life insurance policy – “Performing calculation more efficiently via a computer does not materially alter the patent eligibility of the claimed subject matter” – “Using a computer to accelerate an ineligible mental process does not make the process patent- eligible” • “[W]ithout the computer limitations nothing remains in the claims but the abstract idea of managing a stable value protected life insurance policy by performing calculations and manipulating the results”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 14
  • 15. Federal Circuit – Comparisons with CLS Bank CLS BANK Bancorp • District Court ignored “claim • District Court “evaluated limitations in order to abstract a limitations in the claims as a process down to a fundamental whole before concluding that truth” they were invalid” • “[I]t was difficult to conclude that • “[C]omputer limitations do not the computer limitations…did not play a ‘significant part’ in the play a significant part in the performance of the claimed performance of the invention or invention” AND “claims are not that the claims were not limited directed to a ‘very specific to a very specific application of application’” the inventive concept”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 15
  • 16. Practice Tips for High Tech Prosecution • A method for identifying buyers of used cars, comprising: – receiving one or more specifications from a buyer; – comparing, via an electronic device, the one or more specifications with a seller’s car inventory; – identifying cars from the seller’s inventory that meet one or more specifications from the buyer; and – informing the seller and buyer of the identified cars. Satisfies Machine Prong, but maybe not sufficient© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 16
  • 17. Practice Tips for High Tech Prosecution • A method for identifying buyers of used cars, comprising: – receiving one or more specifications from a buyer; – comparing, via an electronic device, the one or more specifications with a seller’s car inventory; – identifying cars from the seller’s inventory that meet one or more specifications from the buyer [by using a particularized process]; and – informing the seller and buyer of the identified cars. Increases the complexity, but may still not sufficient© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 17
  • 18. Practice Tips for High Tech Prosecution • A method for identifying buyers of used cars, comprising: – receiving one or more specifications from a buyer; – converting the one or more specifications into coded variables; – comparing, via an electronic device, the coded variables with a seller’s coded variable car inventory; – identifying cars from the seller’s inventory that meet one or more specifications from the buyer [by using a particularized process]; and – informing the seller and buyer of the identified cars. Satisfies the Transformation prong© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 18
  • 19. Putting it All Together – Practice Tips for High Tech Prosecution • Use specification to focus on how invention improves “technology” – e.g., uses less processing power, improves result – but NOT simply performs a method more quickly or more efficiently • Don’t simply copy/paste method steps into a CRM claim or add a “component configured to” perform steps in a system claim • Don’t rely simply on “System” or “CRM” claim style for patent eligibility • Merely reciting “one or more computers” in the claim is likely insufficient – Draft claims so that if you take out the computer, the claim won’t work • Integrate machine-related elements throughout the claim • Provide language in the specification identifying a larger concept of which the claims are a subgroup • All independent claims should be prepared to withstand scrutiny© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 19
  • 20. 12790 El Camino Real Eric Nelson San Diego, California 92130 Eric.Nelson@knobbe.comOrange County San Diego San Francisco Silicon Valley Los Angeles Riverside Seattle Washington DC knobbe.com