Bilski: Effect on software and
     business method applications




                    by, arun k narasani




10 Decemb...
Agenda

    Background
    Bilski Case
    BPAI Decisions
    Summary




10 December, 2008              2
BACKGROUND




10 December, 2008                3
Patent eligible subject matter

    35 USC 101
         Process
         Machine
         Manufacture
         Compos...
Patent eligible subject matter

    Diamond v. Chakrabarty (1980)
         Subject matter is intended to be broad
      ...
BILSKI Case




10 December, 2008                 6
Case details

    US application 08/833,892: Claim
      A method for managing the consumption risk costs of a commodity ...
Case details

    Patent originally rejected by Examiner
    BPAI rejects the original objection as
     “erroneous”
   ...
Case details: considerations

    Validity of a claim “is a matter of both claim
     construction and statutory construc...
Case details: considerations

    What is patent eligible process?
         Supreme court has held that “process” as use...
Revisiting patent eligible subject
              matter
    Freeman-walter-Abele test
         In re freeman (1978); In ...
Machine-or-Transformation test

    1. Tied to a particular machine, or
    2. Involves transformation of an article
  ...
Machine Implementation

    Left ambiguous
         “We leave to future cases the elaboration of the
          precise c...
Transformation

    “A claimed process is patent-eligible if it
     transforms an article into a different state or
    ...
Case details: verdict

    Claims patent ineligible as they are neither tied
     to any particular machine nor transform...
Case details: clarifications

    Business methods are not excluded from patent
     eligible subject matter
    Softwar...
Case details: clarifications

    “even a claim that recites "physical steps" but
     neither recites a particular machi...
Effect on software and business
           method applications
    Are pure business method patents out of patent
     el...
POST-BILSKI: BPAI Decisions




10 December, 2008                                 19
Ex parte BO LI (BPAI), 6 Nov, 08

    Claim 42 rejected under §101:
      A computer program product, comprising a comput...
Ex parte BO LI (BPAI), 6 Nov, 08

    BPAI applied the new machine-or-
     transformation test as opposed to the “useful...
Ex parte Godwin and Wanderski,
     13 Nov, 08 (Rehearing)
    Claim 7 rejected under §101:
          A portal server sys...
Ex parte Godwin and Wanderski,
     13 Nov, 08 (Rehearing)
    Issue considered: Have Appellants shown that
     the clai...
Ex parte Halligan and Weyand,
               24 Nov, 08
    Claim 119 rejected under §101:
      119. A programmed comput...
Ex parte Halligan and Weyand,
               24 Nov, 08
    Method is performed using an unspecified
     algorithm
    ...
Summary

    General Business methods without any relation
     to real world objects go out of window
    Software is s...
QUESTIONS?




10 December, 2008                27
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Bilski: Effect on patentability of Software and Business Method patent applications, By Arun Narasani

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This presentation analyzes the patentability of software and business method patent applications in the light of Bilski Case

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Transcript of "Bilski: Effect on patentability of Software and Business Method patent applications, By Arun Narasani"

  1. 1. Bilski: Effect on software and business method applications by, arun k narasani 10 December, 2008 1
  2. 2. Agenda  Background  Bilski Case  BPAI Decisions  Summary 10 December, 2008 2
  3. 3. BACKGROUND 10 December, 2008 3
  4. 4. Patent eligible subject matter  35 USC 101  Process  Machine  Manufacture  Composition of matter or  Any new and useful improvement 10 December, 2008 4
  5. 5. 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 10 December, 2008 5
  6. 6. BILSKI Case 10 December, 2008 6
  7. 7. Case details  US application 08/833,892: Claim A 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 10 December, 2008 7
  8. 8. 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 10 December, 2008 8
  9. 9. Case details: considerations  Validity of a claim “is a matter of both claim construction and statutory construction”  No claim construction dispute 10 December, 2008 9
  10. 10. 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? 10 December, 2008 10
  11. 11. 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 10 December, 2008 11
  12. 12. 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 10 December, 2008 12
  13. 13. 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.” 10 December, 2008 13
  14. 14. 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) 10 December, 2008 14
  15. 15. Case details: verdict  Claims patent ineligible as they are neither tied to any particular machine nor transforming any article from one state to another 10 December, 2008 15
  16. 16. Case details: clarifications  Business methods are not excluded from patent eligible subject matter  Software is not excluded from patent eligible subject matter 10 December, 2008 16
  17. 17. 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.” 10 December, 2008 17
  18. 18. 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? 10 December, 2008 18
  19. 19. POST-BILSKI: BPAI Decisions 10 December, 2008 19
  20. 20. 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. 10 December, 2008 20
  21. 21. 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 10 December, 2008 21
  22. 22. 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. 10 December, 2008 22
  23. 23. 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.” 10 December, 2008 23
  24. 24. 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. 10 December, 2008 24
  25. 25. 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.” 10 December, 2008 25
  26. 26. 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” 10 December, 2008 26
  27. 27. QUESTIONS? 10 December, 2008 27
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