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Seven Things to Know about Patents as Business Tools

Patents can be important tools for business development. However, in order to use them effectively, it is necessary to understand how they work.

The first thing to understand is that you do not need a patent to practice your invention. The patent is a “right to exclude” others from making/selling/using the invention.

The second thing to understand is that the less details in your claim, the broader the scope of the patent. For example, if you claim a red widget, a blue widget does not infringe. Unless the color red is important to the function of the widget, the word “red” does not belong in the claim.

The third thing to understand is that getting a patent is your reward for providing a description that is sufficient forone of ordinary skill (in the relevant technology) to actually make or do the invention. That means you need to “tell all”. The price for holding back can be invalidation of your patent after it is granted.

The fourth thing to understand is that there are no “patent police”. Once the patent is granted, the owner is responsible for identifying infringers and filing a lawsuit against them. These infringement lawsuits are civil suits so there is no government interest in how they are resolved (just like personal injury, breach of contract and divorce). There are “private enforcers” that will file and litigate patent infringement lawsuits for a portion of the damages if the situation warrants it. These enforcers are called non-practicing entities (NPEs). The cost of an infringement suit (in legal fees) is typically measured in millions of dollars for each side. The proceedings can go on for years. This means that patents are most suitable for products expected to generate revenues measured in tens, hundreds or thousands of millions of dollars.

The fifth thing to understand is that having a patent is no substitute for having proof of concept. Investors want to see proof that the product works and that there is a market for it. That is what closes deals. A patent (or even a pending application) can sweeten the deal, but it does not drive the bargain by itself. Inventors that think they will file a patent application and sell the idea without product testing and/or marketing research are likely to be disappointed.

The sixth thing to understand is that the patent office doesn’t care. The Examiner that handles your application is typically indifferent as to whether the final answer is “yes” or “no”. The person that cares about your application is your representative (Agent or Attorney). Look for a representative that has a practice focused on dealing with Patent Examiners.

The seventh thing to understand is that the process of getting a patent granted is both costly and time consuming. The success stories usually involve inventors that launched a company (or product) after filing an application and used part of their revenue stream to fund the patenting process. In other words, a patent strategy should be part of a business plan not a substitute for a business plan.


TPP on Patents: New may not be absolutely novel


The TPP (Trans-Pacific Partnership) was apparently ratified on October 5, 2015 by the United States, Japan, Australia, Canada, Malaysia, Mexico, Peru, Vietnam, Brunei, Chile, New Zealand, and Singapore. While the treaty covers many aspects of trade, one provision in particular will be of interest to readers of this blog. The full text has not been officially released yet by a leaked version has been provided by Wikileaks.Article QQ.E.2: {grace period}

Each Party shall disregard at least information contained in public disclosures used to determine if an invention is novel or has an inventive step if the public disclosure:

  • was made by the patent applicant or by a person who obtained the information directly or indirectly from the patent applicant; and
  • occurred within 12 months prior to the date of filing of the application in the territory of the Party.

This is similar to 35 U.S.C. §102(b) prior to the AIA. Japan previously had a six month grace period and Australia and Canada already had a one year grace period. The exact status of the grace period in the US under tha AIA has been somewhat unclear.

Prior to the AIA, an inventor could disclose an invention (e.g. at a conference or in a scientific publication) and file a provisional patent application one year later. This effectively provided two years to file a “bona fide” application on the disclosed invention.

Following the revision of §102, Chief Judge Randall Rader of the CAFC (now retired) was heard to say that the grace period under the AIA required filing of a non-provisional application (US or PCT designating US) within the first year. While the rationale behind this statement was not clear to me, Judge Rader’s opinion carries infinitely more weight than mine, although he retired from the bench before the CAFC dealt with any cases on the subject.

It is not yet clear how section 102 (AIA) will be interpreted under TPP.

Assuming that the leaked copy of the treaty is correct, we now have a bloc of countriesa including all of North America as well as Australia/New Zealand and Japan that provide a one year grace period for inventors.

It will be interesting to see how this influences the pending Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the US. A grace period is being discussed in those negotiations although it is difficult to guess how likely it is to find its way into the final agreement.

Having secured a 12 month grace period in TPP, the US is in a position to push for a similar provision in TTIP under the banner of “International Harmonization”.

Some readers may recall that it was “International Harmonization” which led to inclusion of first [inventor] to file provisions in the AIA. It will be interesting to see if the EU is prepared to pay the piper in TTIP.


Google Glides by Section 101

US 2015/0227523 assigned to Google Inc. of Mountain View CA relates to computer implemented methods, non-transitory computer storage devices and computer implemented search systems. The application claims priority back to a May 2009 provisional application through an intervening US utility application from May 2010. The claims all relate to the idea that a single search query is applied to local files belonging to the OS, local files belonging to third party applications and the Internet. Results from all sources are presented in a ranked list and the ranking may be adjusted after the user makes a selection from the initial list.

As one might expect, there are a lot of novelty and obviousness rejections on the record in this family. However, there are three interesting things about the prosecution of this case.

The first interesting thing is that Google seems to feel it pays to have a US application pending, even if there is no measurable progress towards grant.

In the May 2010 parent case, there were a total of four Office Actions (two non-final and two final) with an intervening RCE. An interview was conducted prior to filing the fourth response but the fourth OA response elicited an advisory action from the Examiner.

Google responded by filing a notice of appeal and then the current application. Based on PAIR and the PTAB portal it does not seem like an appeal brief was ever filed. This is an interesting strategy because it buys time (2 months) and is less costly than a second RCE ($800 vs $1700 for a large applicant). The current case was filed exactly eight months after the last OA in the May 2010 parent case. As a result of this strategy, the next RCE filed will be a “first” RCE in the current case and subject to a fee of $1200 instead of $1700; large entity). The aggregate savings (notice of appeal instead of second RCE + first RCE instead of third RCE) is $1400. That is nearly enough to offset the cost of filing the present application ($1600; large entity).

The second interesting thing is that §101 rejections have not been raised. This is interesting because of the independent claims presented:

A computer-implemented search method, comprising:                                       

receiving, by a search application installed on a user device, a query entered by a user of the device;              

providing, by the search application, the query to a plurality of third-party applications installed on the device, other than the search application;                                                                                                                                  

receiving, by the search application, a respective response from each of the third-party applications, each response including one or more search results that identify data managed by the respective third-party application from which the response is received;                                                                                                                                         

integrating, by the search application, the responses from the third-party applications into an integrated result set that includes groups of search results, wherein each group includes only search results received from a corresponding one of the third-party applications;                                                                                                                                    

ranking the groups of search results in the integrated result set based on prior user selections of search results from the third-party applications on the user device; and                                                                                                  

presenting, by the search application, the integrated result set on the user device in an arrangement that corresponds to the ranking of the groups of search results in the integrated result set.

One or more non-transitory computer storage devices having instructions stored thereon that, when executed by a computer, cause the computer to perform operations comprising:                                                                       

receiving, by a search application installed on a user device, a query entered by a user of the device;           

providing, by the search application, the query to a plurality of third-party applications, other than the search application; receiving, by the search application, a respective response from each of the third-party applications, each response including one or more search results that identify data managed by the respective third-party application from which the response is received;                                                                                                                       

integrating, by the search application, the responses from the third-party applications into an integrated result set that includes groups of search results, wherein each group includes only search results received from a corresponding one of the third-party applications;                                                                                                                                   

ranking the groups of search results in the integrated result set based on prior user selections of search results from the third-party applications on the user device; and presenting, by the search application, the integrated result set on the user device in an arrangement that corresponds to the ranking of the groups of search results in the integrated result set.

A computer-implemented search system, comprising:                                                                                                   

a search application, on a user device, configured to provide an interface for receiving user-entered queries; and          

a plurality of third-party applications, on the user device, that are separate from the search application and configured to receive the user-entered queries from the search application, and to provide search results to the search application that are determined to be relevant to the user-entered queries,                                                                 

wherein the search application is further configured to generate an integrated list of search results from the plurality of third-party applications, to group the search results in the integrated list into groups of search results, wherein each group includes only search results received from a corresponding one of the third-party applications that provided the search results, and to order the groups of search results in the integrated list based on a measure of how frequently search results from the respective third-party applications have previously been selected within the search application.

As regards method claim 21 and Beauregard claim 31, the recited

receivingprovidingintegratingranking and presenting seem, at least on their face, to be routine computer functions which define an abstract idea in the form of a computer algorithm. Assuming that this is not the case, it is still interesting that the Examiner did not see fit to ask why the claims are more than an abstract idea by putting forth a § 101 rejection.

As regards system claim 40 it recites two software components (a search application and a plurality of third-party applications) which each reside “on a user device”. Although this is a system claim, no hardware components other than “user device” are recited. Descriptive language describes how the software components interact with one another in functional terms. On its face this would seem to be either a claim for “software per-se” or a statement of an abstract idea with instructions to “apply it” on a computer. Assuming that this is not the case, it is still interesting that the Examiner did not see fit to ask why the claims are more than software per-se or an abstract idea by putting forth a § 101 rejection.

The third interesting thing is the preamble of Beauregard claim 31: “One or more non-transitory computer storage devices having instructions stored thereon that, when executed by a computer, cause the computer to perform operations comprising: …”

Beauregard claims originated in an era when computer program products were normally distributed on tangible media (first diskettes, then CD ROM disks). They gained popularity as a way to claim a program disembodied from a computer. This was, and still is, desirable because the purveyor of the software product is often separate from the purveyor of the hardware product on which the software runs.

The standard preambles for Beauregard claims  were “A machine readable media comprising instructions…” and “A computer program product comprising instructions…” As the Internet evolved and it became common to distribute software via download from a remote server, US Examiners began to ask for a “non-transitory” stipulation in claims of this type to make it clear that “signals per-se” are excluded.

Claim 31 is the first time that I have seen the “non-transitory” stipulation applied to a computer storage device (which is inherently non-transitory). Claim 31 does not require that the “instructions” on the device be non-transitory. It is interesting that the Examiner did not ask why the “instructions” are not a signal per se.

The take home message here is that there appears to be a lot of variation in the way the rules are applied within the US patent office.



If it is too silly, is it still Trademark Infringement?

I don’t usually relate to trademark issues but this is too good to pass up:





Fat Lady in the Limelight?

J.D. Salinger was famous for saying (in Catcher in the Rye) “It’s not over until the fat lady sings.” This posting is about the August 13, 2015 en banc decision from the CAFC in Limelight Networks, Inc. v. Akamai Technologies, Inc. The CAFC heard the court on remand from the Supreme Court.

The remand order itself was covered in an earlier posting.

For those readers that have not been following the case, in the original CAFC en-banc decision of August 31, 2012 that court “…reconsider[ed] and overrule[d] the 2007 decision of this court in which we held that in order for a party to be liable for induced infringement, some other single entity must be liable for direct infringement. BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007). To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.

The 2012 court ruled: “Requiring proof that there has been direct infringement as a predicate for induced infringement is not the same as requiring proof that a single party would be liableas a direct infringer. If a party has knowingly induced others to commit the acts necessary to infringe the plaintiff’s patent and those others commit those acts, there is no reason to immunize the inducer from liability for indirect infringement simply because the parties have structured their conduct so that no single defendant has committed all the acts necessary to give rise to liability for direct infringement.”

On June 12, 2014 the Supreme Court remanded the Case to the CAFC indicating: “The Federal Circuit seems to have adopted the view that Limelight induced infringement on the theory that the steps that Limelight and its customers perform would infringe the ’703 patent if all the steps were performed by the same person. But we have already rejected the notion that conduct which would be infringing in altered circumstances can form the basis for contributory infringement, and we see no reason to apply a different rule for inducement. In Deepsouth Packing Co. v. Laitram Corp., 406 U. S. 518 (1972), a manufacturer produced components of a patented machine and then exported those components overseas to be assembled by its foreign customers. (Theassembly by the foreign customers did not violate U. S.patent laws.) In both Deepsouth and this case, the conduct that the defendant induced or contributed to would have been infringing if committed in altered circumstances: in Deepsouth if the machines had been assembled in the United States, see id., at 526, and in this case if performance of all of the claimed steps had been attributable to the same person. In Deepsouth, we rejected the possibility of contributory infringement because the machines had not been assembled in the United States, and direct infringement had consequently never occurred. See id., at 526–527. Similarly, in this case, performance of all the claimed steps cannot be attributed to a single person, so direct infringement never occurred. Limelight cannot be liable for inducing infringement that never came to pass.

On May 13, 2015 a CAFC panel comprising Chief Judge Prost and Judhes Linn and Moor delivered an opinion in which the court held:

In enacting § 271(b) and (c), Congress cleared away the morass of multi-actor infringement theories that were the unpredictable creature of common law in favor of two infringement theories that it defined by statute…. to the extent that tort law’s contributory liability principles are applicable at all, § 271(b) and (c) embody the application of contributory liability principles to patent law…. The fact that Congress chose to impose some forms of secondary liability, but not others, indicates a deliberate congressional choice with which the courts should not interfere…. Furthermore, Akamai’s broad theory of attribution— in which a defendant would be liable for “causing and intending an act or result,” Akamai’s Letter Br. at 4 (citations omitted)—would render § 271(b) redundant. Subsection (b) states: “Whoever actively induces infringement of a patent shall be liable as an infringer…. As this court correctly recognized inBMC, “[t]he concerns over a party avoiding infringement by arms-length cooperation can usually be offset by proper claim drafting. A patentee can usually structure a claim to capture infringement by a single party… guilt of direct infringement of a method claim under § 271(a) requires performance by the accused of all steps recited in the claim… Thus, contrary to Akamai’s and the dissent’s positions, actors whose innocent actions coordinate to cause harm generally are not subject to liability at common law. Here, there is no evidence that Lime- light’s customers knew what steps Limelight was taking, much less evidence that they coordinated further. Thus, there was no concert of action.”

The May 2015 panel concluded , of course, that the district Court’s JMOL of non-infringement was proper.

That brings us to the August 13, 2015 en-banc decision of the CAFC. The decision is short and to the point (9 pages). It opens with a statement that “This case was returned to us by the United States Supreme Court, noting “the possibility that [we] erred by too narrowly circumscribing the scope of § 271(a)” and suggesting that we “will have the opportunity to revisit the § 271(a) question . . . .”

The 2015 en banc Court states: We will hold an entity responsible for others’ performance of method steps in two sets of circumstances:

(1) where that entity directs or controls others’ performance, and

(2) where the actors form a joint enterprise.

The court then defines joint enterprise:

A joint enterprise requires proof of four elements:

(1) an agreement, express or implied, among the members of the group;

(2) a common purpose to be carried out by the group;

(3) a community of pecuniary interest in that purpose, among the members; and

(4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.

The bulk of the opinion goes to establishing that Limelight “directs or controls” that its customers perform the tagging and serving steps of the method claim at issue. The conclusion is that “At trial, Akamai presented substantial evidence from which a jury could find that Limelight directly infringed the ’703 patent. Therefore, we reverse the district court’s grant of judgment of noninfringement as a matter of law. Because issues in the original appeal and cross-appeal remain, we return the case to the panel for resolution of all residual issues consistent with this opinion.”

So the fat lady has sung only the rules for infringement. Final decision in this case will (apparently) come from a future CAFC panel. Time will tell whether the Supreme Court approves of the new rules they invited the CAFC to suggest.


Apple Sees Value in Maintaining a Patent Application that May Never Be Granted

This posting is the result of the serendipitous appearance of a “Business Insider” article entitled “Apple has filed a patent that could completely reinvent the idea of a mixtape” in my inbox. The patent application referred to is US20150220634. A quick look at the claims in the application surprised me for two reasons.

The first reason for surprise is that the claims are all directed towards user side implementation (i.e. playback of a “digital mix tape” by a recipient after someone else has prepared it).

The second reason for surprise is that although the application was filed in April 2015, the claims indicate no effort to avoid a §101 rejection as being directed towards an abstract idea.

The second reason is partly explained by the fact that the application is a continuation of US13/481,405 filed on May 25, 2012. At that time most of us knew Alice as a flighty young fictional lady who fell down a rabbit hole and/or went through a looking glass. In fact on July 9, 2012 a panel of the CAFC went so far as to hold that “…when— after taking all of the claim recitations into consideration—it is not manifestly evident that a claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under § 101.”

This means that Apple, and their legal representatives, were following accepted practice when they filed US 13/481,405 in May of 2012. The fact that the “manifestly evident” doctrine of that first CAFC panel would subsequently be overturned by an en banc re-hearing which was subsequently validated by the Supreme Court was blissfully unknown to all when Apple filed their first “Digital Mix Tape Application”. Unfortunately for Apple, by the time the first Office Action in that case was issued (August 12, 2014) the “manifestly evident” doctrine was only a fond memory and the Examiner stated unequivocally that the claims were directed towards an abstract idea because the method steps are not performed by a machine and/or because “providing a compilation of media tracks to a consumer as a gift” is an abstract idea. The Office action also contained §112 (indefinite) rejections and a §102 and several §103 rejections.

Looking at the wrapper for the parent case (13/481,405) provided insight about the first reason for surprise in the continuation application (claims are all directed towards user side implementation). In a response filed on November 12, 2014, Apple cancelled all of the claims in the parent case and entered new claims. This made short work of all the rejections of record. However, the Examiner found the amendment non-compliant because the new claims are directed towards user side implementation (i.e. playback of a “digital mix tape” by a recipient after someone else has prepared it) while the original claims were directed towards server side implementation (i.e. preparation of a “digital mix tape” by the server in response to a request followed by transmission to a recipient).

These new “user side” claims became the subject of the April 2015 application which was the subject of the Business Insider article.

Since we would all like to have a portfolio like Apple’s what can we learn from their handling of the case?

The most obvious thing is “minimize estoppel”. Once Apple decided they were unlikely to get an allowance in the original case, they did not provide any substantive answers to the rejections offered by the Examiner.

The next, less obvious, thing is that having an application pending in the US is valuable. Apple spent several thousand dollars to file a continuation application with only user side claims which will be tricky to enforce if granted. Presumably this is largely a ploy to allow them to return to the more commercially relevant sever side claims in the future if they develop a product around this concept.

The least obvious thing is enrich your specification with unclaimed detail. Claims like: “…presenting a first name for the first media item before playing the first media item for the first time; and presenting a second name for the first media item after playing the first media item for the first time, where the first name is a fake name and the second name is an actual name of the first media item.” are presumably supported by the specification of the parent application, although they were not claimed. Even the independent claims in the April 2015 continuation application have features that were not present in the parent application. This forces the Examiner to reveal the best references available. Apple can then assemble a set of features that they feel is patentable over the art and draft a server side claim to be filed in a subsequent continuation application.

The last thing is, alas, all too obvious. You want to have a budget like Apple’s so you can play these games with numerous applications in a diverse portfolio.

Feedback on how those of us with more modest budgets might employ a similar strategy will be appreciated.


July 2015 Guidelines on Patentable Subject Matter

The USPTO has issued a supplementary set of guidelines on subject matter eligibility of July 30, 2015. The new material includes a Federal Register Notice, a main document entitled “Update on Subject matter Eligibility”, Appendix 1 (Examples), Appendix 2 (Index of Examples), Appendix 3 (Court decisions) and a “Quick reference sheet”. The stated purpose is to respond to feedback from the public.

Operating on the principle that a picture is worth a thousand words the illustration from thesecond page of the quick reference sheet is reproduced here:

July 2015 guidelines

The diagram makes it seem like any method of correlating or comparing is unlikely to be patentable. We learned from Alice that dressing these methods up as computerized systems is unhelpful.

Hopefully the USPTO is sending us the message the Supreme Court wants us to get.

Feedback on tangible lessons to be learned from this guidance will be appreci


What the Supreme Court Will Not Tell Us

Since the CAFC’s third decision in Ultramercial, Inc. v. Hulu, LLC. which found the claims in that case patent ineligible, the CAFC has rendered only one decision in which the claims of a computer implemented invention were held to be patent eligible subject matter [DDR HOLDINGS LLV v HOTELS.COM].

The Apparent dichotomy between those rulings left many of us hoping that the Supreme Court would grant certiorari in the Ultramercial case. Those hopes were more like wishes, since the Supreme Court had already granted/vacated and remanded (GVR) twice after the two initial CAFC decisions were deemed unacceptable.

On June 29, 2015 the Supreme Court denied certiorari in the Ultramercial case, leaving the wish ungranted.

It is not all clear whether we should be wishing for a grant of certiorari inn the DDR HOLDINGS case or not. DDR HOLDINGS is the only post Alice V CLS Bank case dealing with “software” implemented claims that went in favor of the patentee. If the Supreme Court offers their insight, there may be no favorable § 101 decisions in the software field, although those insights might make the case law more uniform and easier to understand.

Careful what you wish for!


Careful what you wish for!

The supreme court is not telling us everything:

What the Supreme Court Will Not Tell Us


Five Tips for Identifying Value in a Providsional Patent Application (PPA)

Venture Capitalists (VCs) like Intellectual Property (IP) but see very little of it. Most entrepreneurs seeking funding file a provisional patent application so they can tell one or more VCs they have some IP. Since VCs typically don’t have legal expertise, they usually don’t take a closer look at these provisional applications (PPA). However, VCs are entitled to ask for quality IP.

magnifier graphicHere is a list of five things to focus on in a provisional patent application to get a rough idea of its potential value. Both inventors and VCs should focus on these points when preparing/reviewing a PPA as indicators of potential value.

1)            Are there claims? This is a yes or no question. “Yes” means the inventor made an effort to define their idea as an invention. “No” means they did not make the effort. If they did not make the effort, one might ask why.

2)            Who do you sue? This is difficult (but not impossible) to answer if there are no claims. If there are claims, ask if everything in the claim is likely to be done by a single party. The answer must be yes for an infringement lawsuit to be possible. Since IP derives its value from the potential to sue, this is a critical point in estimating potential value.

3)            Is there a real world effect? We live in a world where a “telephone” is actually a technological Swiss army knife. A lot of the features though are purely software. Once the application is installed, the phone acquires new capabilities. While cool apps have great business potential, they are difficult to patent. Software per se has always been un-patentable. The most reliable way around this is to show that the software, when run on the device, has a real world effect. One type of real world effect is that the software improves performance of the machine on which it is running (e.g. makes it run faster, cooler or more reliably or extends battery life). Another type of real world effect is control of a non-computer component. Demonstration of a real world effect can be the key to convincing the patent office that the invention is in a field which can be patented. If you cannot convince them, there will be no patent and therefore no value from the IP.

4)            Does the invention go beyond business? This is a corollary to (3). The patent office does not believe that accounting functions like billing are “real world effects”. If the description of the invention focuses on business related activities it is difficult to convince the patent office that the invention is in a field which can be patented. Again, if you cannot convince them, there will be no patent and therefore no value from the IP.

5)            Did you say “Wow!” when you read the application? The patent office searches computerized databases to find publications on related technology. For the initial evaluation, it is sufficient to use your gut reaction. If you read the application and said “So what?” there is no breakthrough described. If you said “Wow!” you perceive a breakthrough. The casual reader’s impression of a breakthrough is not a guarantee that the patent office will feel the requirements for getting a patent have been met, but if the casual reader cannot see a breakthrough, the patent office almost certainly will not. That means no “Wow!” probably no patent and probably no value from IP.

Items (1) and (2) in the list relate to evaluating the approach the entrepreneur takes to IP portfolio development. Those that don’t put much into it are unlikely to get a lot out of it. Items (3) and (4) relate to an understanding of the rules for what is potentially patentable. Unfortunately, a lot of potentially valuable product ideas are simply not eligible for patent protection. Investors in technologies that are deficient with respect to items (3) and (4) need to develop a plan for holding on to market share that does not rely on the exclusivity provided by patent protection. Development of brand recognition is the obvious choice here. Item (5) relates to an instinctive evaluation of the legal requirement that an invention be new and non-obvious to be patentable. Again, if it seems unlikely that the application will become a granted patent, branding is an appropriate alternative.