That’s Patentable? The Far-Reaching Definition of an “Invention”

U.S. patent law provides that “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,” 35 U.S. Code §101. This leaves open a broad range for potential patent protection. The categories of a “machine, manufacture, or composition of matter” provide for many traditional concepts of an invention, such as devices, chemicals or other physical objects. Focusing on these physical items as being invention ignores the “process” category. The process (or method) type of patent has been used to cover a broad range of technologies – from manufacturing techniques to medical procedures. It is this category’s open-endedness which has presented a number of extraordinary patent opportunities as well as a fair share of headaches.

Concerns that method patents may be used to cover broader concepts than is appropriate has caused many to struggle to determine what types of technologies should be allowed to receive patents. The myriad court decisions and United States Patent and Trademark Office rules in the past few decades alone have created a complicated thicket of patent eligibility rules. Despite these issues some interesting ideas and non-traditional concepts have been granted patents. While some might argue that such patents are not appropriate, the Patent Office’s willingness to grant such patents introduces some leeway into determining what might be patentable and that might otherwise be overlooked.

In some cases, patents have been issued for processes used to play card games. One patent that has reached a particular level of notoriety (or infamy) is US 5,662,332. This patent covers a method of playing trading card games where each player constructs a deck of cards. The claims include coverage for “designating the [card] being brought into play by rotating the [card] from an original orientation to a second orientation.” Further claims cover a rotating, or ‘tapping,’ to make players are aware the trading card is in use.

Patent protection has also been awarded to methods involved in the presentation used in computer games. Patent US 6,935,954 was awarded for a sanity system used in a video game where the “character may experience hallucinations as a result of the sanity level.” During game play, the sanity level of the game character is modified based on a character reaction and an amount of character preparation. As the game continues, game play is impacted by varying game effects according to the game character sanity level.

In another patent, US 8,082,499, the graphical interface for an interactive dialog is presented. A dialog choice indicator is shown which has a number of directional choices. Dialog responses corresponding to a particular emotion are then provided in a consistent location/direction.

In 2014, the U.S. Supreme Court decided CLS Bank International v. Alice Corp which invalidated claims that were determined to be drawn to an abstract idea. In response to this case, the USPTO has adjusted their stance regarding patentable subject matter and has rejected many applications held to be too “abstract”. However, this has not prevented the Patent Office from still issuing patents directed to some intriguing methods.

Patent US 8,920,245 is directed to a video game award method. According to the claimed method, the player is awarded a digital gaming object while playing a first game and is then able to use the digital gaming object within a different game.

A language-based video game method is protected by US 8,825,492. In this method, the game display shows an animated portion of a human head related to speech to show a pronunciation of selected text. The text is then transformed into a non-textual form which can be used by the avatar to overcome at least one challenge, for example, a letter of the alphabet may be transformed into a rope which can be used to overcome a rock climbing challenge.

In another post-Alice patent, protection extends beyond graphic displays. US 8,721,415 covers a computer-based solitaire game with stack-based pay table. The player is provided a payout which is calculated based on a per-card payout award and the actual number of cards transferred during the game.

These examples demonstrate that patentable inventions can be made in non-traditional fields. Simply because an invention is not incorporated in a physical object, such as a motor or a chemical composition, or relates to an industrial process, doesn’t mean that patent protection is unavailable. While care must be taken to ensure the claims comply with patentable subject matter restrictions, great opportunities still exist for patenting concepts which might otherwise be overlooked. 

Patent and Copyright Protection for Software API

Recently the United States Court of Appeals for the Federal Circuit had a chance to weigh in on the IP protections afforded software. When deciding Oracle v. Google (Oracle America, Inc. v. Google Inc.), the Court concluded that Google violated Oracle’s copyright in the Java API. The court reasoned that the “declaring code and the structure, sequence, and organization of the 37 Java API packages” were entitled to copyright protection. Some viewed this as a reversal of the perception that API’s were not copyrightable.

API’s (or application program interfaces) are critical elements in modern software that allows programs to interact. The API describes how one program can call to another. This is often seen as a functional requirement for compatibility. By enabling one program to use features from another program, programmers can avoid recreating large amounts of code. Using similar APIs allows programs to be more easily ported from one system to another. Additionally, APIs can encourage development by third party programmers by making interoperability easier which can lead to a richer software environment that is more appealing to customers.

While the Court’s decision revolved mostly around copyright issues, the court acknowledged the potential relationship with patent laws and indicated that computer software may be covered by both copyright and patent laws.

Copyright protection has the potential to be extremely problematic. However, patent protections are equally problematic. In truth, both forms of protection have inherent balancing factors. Patents require going through the U.S. Patent and Trademark Office application process which ensures patents meet certain requirements, such as novelty, subject matter, non-obviousness, etc. This makes seeking patent protection a large investment in both time and money. In contrast, copyright protection may be seen as considerably easier to get as there is no substantive examination process. Additionally, a copyright’s duration is considerably longer than a patent’s.

However, these differences are offset by the associated scope of protection afforded by copyrights and patents. Where copyrights are limited to a specific expression, patents may have a broader coverage for the underlying structure and functionality of the software. This can make working around a patent claim considerably more difficult than avoiding a copyrighted expression.

Software programs are currently deemed eligible for protection from both copyright and patent laws. To some, this may seem counter-intuitive since software is often considered functional since it has instructions for a process. Copyrights do not protect procedures; whereas, patents do (although neither extends protections to cover abstract ideas). However, this reasoning overlooks the fact that software programs can be viewed as having distinct aspects: namely an expressive aspect and a functional aspect.

Even when a program is written in order to provide a particular result, there can still be a variation (or expression) in the way the program is written. For example, there are a number of programing contests where programmers attempt to make the least understandable program. These obfuscated code contest entries produce functioning programs despite being nearly indecipherable as written.

Generally, programmers are encouraged to follow best practices so that anyone who later works with the program can easily understand the nature of the code. This still leaves room for personal style and expression. Returning to the API, the declaration is typically defined as a short command line call for each function. In practice there is limited room for personal expression. A function to return the larger of two integers would be expected to be written as “max (int a, int b)” or as “maximum (int a, int b).” Though the options are varied, using a declaration of add (int a, int b) for such a function would be highly unusual.

One allegation against Google is that the copying of the API is an attempt to gain the benefit of the existing Java environment in order to leech off of the work originally done to establish the Java platform. While this particular fact pattern has the potential to create problems for people hoping to maintain legacy software environments, there appears to be little risk to developers working with an existing platform. This case does not involve the use of the API in programs intended to operate with the Java platform but rather the attempt to create a replacement of the Java platform. Furthermore, the Federal Circuit emphasized the significance of the copying of the structure and organization of the API packages – not simply the use of the API.

Ultimately, this issue is now in the hands of the U.S. Supreme Court who have been asked to take up the case. Some are concerned that given the Supreme Court’s track record against software protection, the Supreme Court may make a ruling which proves problematic for software protection. It is still unlikely they will totally do away with the dual protections of copyright and patents for software, if they take up the case.

Patents In the Shark Tank

My family and I enjoy watching Shark Tank. It’s a mix of business, technology, humor and, in some cases, is a testament to the entrepreneurial spirit of people. Of course, we realize it is mainly about entertainment. It doesn’t mean, however, that there aren’t some learning opportunities to be had.

As a patent attorney, my ears perk up a bit when I hear a shark ask about patents or patent applications or when the team seeking investment (the “contestant?”) mentions either having a patent or having applied for a patent. I have previously written about the differences between having obtained a patent and having applied for a patent. When this issue comes up on Shark Tank, I point it out to my wife and daughter but they just roll their eyes and say “we know, we know.”

When patents come up on Shark Tank, there isn’t an in-depth discussion of what the issued claims cover or what scope of coverage is being pursued. The show isn’t set up for that type of analysis and, I will admit, would be deadly boring if ever there was such a discussion. It is surprising to me, however, that sometimes the sharks consider having or not having patent protection (pending or issued – it doesn’t seem to matter) is important to whether or not they will invest without having any idea as to the scope of protection. Again, merely saying one has a patent or a pending application, without providing an understanding of what the claims cover, might give a potential investor some comfort but it really doesn’t convey any useful information.

Recently, Funbites came on seeking an investment. Funbites sells a device that cuts kids’ food into different shapes. During the pitch, Funbites told the sharks that they had an issued patent and they were ultimately successful in landing a shark. It’s not clear that having a patent helped land a shark, however, looking at the device, I wondered what the patent claims covered.

It didn’t take too much research to find Funbites’ U.S. Patent 8,695,220 (‘’the ‘220 patent”) with the not-so-fun-sounding title “Hand-Held Food Cutter with Shape Imparting Device.” As we know, however, it is the patent’s claims that determine the scope of coverage, i.e., its strength, as they define what others cannot make, use or sell without possibly being liable for infringement.

There are some general rules when it comes to claim interpretation:

1. broad claims are better than narrow (more specific) claims; 
2. long claims are narrower than short claims; and 
3. it’s easier to avoid infringing a narrow claim. The second rule is true because long claims include more components and make it more specific as to what the claim covers. The third rule tends to be true because, generally, infringement can be avoided by not including one or more component recited in a claim and, as there are more components in a long claim, it’s likely something can be removed or changed.

The ‘220 patent includes 14 claims with claim 1 being the only independent claim – and it is pretty long and, therefore, narrow. This is not surprising as it may have been necessary for the claim to be more specific in order to overcome the prior art cited against it during its examination in the Patent Office. The evolution of a claim during its pendency in the Patent Office will have to be the topic of a separate article. Suffice it to say that they obtained a patent but it’s narrow.

So, where does that leave us? Someone wanting to compete with Funbites or understand the scope of coverage will read the ‘220 patent and review claim 1. This review would probably include determining what components are “specific” and, therefore, might be changeable to make a cutting device that would not infringe the claim.

Without reciting the whole claim here, there are a number of terms in the claim that could be removed or changed in a competing device such that the competing device would likely not infringe. For example, the claim requires “an arcuate convex shaped bottom edge that is beveled for cutting the food” and “bottom edges” of second walls that are “V-shaped cutting edges” and where “bottom edges” of “vertical end walls only are beveled along an inner surface thereof.” (emphasis added). What if the competing device has a bottom edge that is not an “arcuate convex” shape and is not “beveled for cutting?” What if something different than a “V-shaped cutting edge” is provided? What if the vertical end walls are not beveled only “along an inner surface?” It may be arguable that these changes take the competing device out from the scope of the claim.

There are certainly other aspects of the claim that might be changed to avoid its infringement and the foregoing was not meant to be an exhaustive list. It does seem, however, that there are points that could be changed in order to avoid being accused of infringement. Generally, however, when considering whether a device is “cleared” with respect to an issued patent it’s highly recommended that you consult with an experienced patent attorney.

I recognize that the sums of money that the sharks are investing on the show are relatively small and that there isn’t a lot of time for due diligence including patent portfolio review. I would expect that their larger deals include a comprehensive review of the IP positions of the parties. I just want the reader to understand that merely saying one has a patent or has applied for a patent doesn’t necessarily mean that a strong position has been staked out and that it doesn’t take that much to make such a determination.

DISCLAIMER: These are just the personal opinions and musings of one who watches too much television and thinks too much, sometimes, about patents. No one should rely on this analysis as to the relative strength or weakness of any patent discussed herein nor should anyone base any business decisions on the opinions expressed herein.

Starting a New Company? Protect Your Intellectual Property Now or Maybe Never

When getting a startup off the ground and in the course of ongoing operations, it is important to take care of some fundamental housekeeping matters.  The failure to do so can result in problems that could be costly and/or difficult to resolve later.

Incorporation
Steps should be taken to incorporate early.  The entity form and jurisdiction should be discussed with legal counsel so that appropriate tax and legal issues can be considered.  When more than one individual is involved, the terms of an operating agreement that address contingencies and matters of corporate control should be discussed at the outset. Some firms offer special fee arrangements for startups which can be attractive.  This firm, through the PRETI FLAHERTY BUSINESS LAUNCH PAD ™, assists in the formation of new ventures under certain guidelines.

Employment Agreements
All employees, members and key individuals of the company should be required to execute confidentiality and assignment agreements.  These agreements should address basic obligations to the company including the obligation to maintain sensitive company information in confidence, the obligation to assign intellectual property to the company, an identification of pre-existing intellectual property of the individual, non-compete obligations, non-solicitation obligations with respect to customers and other employees and assurances that the employment will not conflict with any prior obligations of the employee.  A failure to enter into such agreements upon the formation of a company with key personnel can result in claims that the company does not own its intellectual property or claims that the company does not possess the exclusive rights to its intellectual property.

Consulting Agreements
Frequently, startups need to rely on other parties for expertise in specialized areas.  Prior to the commencement of work with any consultants, a consulting agreement should be put in place that provides, in addition to a work statement that addresses the specifics of the undertaking and compensation arrangements, obligations of confidentiality of company information and information developed in the course of the undertaking, a right of use with respect to any intellectual property of the consultant embodied in the deliverables, obligations to assign intellectual property developed pursuant to the agreement, an agreement not to solicit employees of the company and assurances that the undertaking does not conflict with any prior obligations assumed by the consultant.  Absent an express agreement with consultants, disputes regarding the ownership and use of intellectual property developed by the consultant can arise.

Filing of Patent Applications on Inventions
As a result of changes in the patent law over the last several years, the party who first files a patent application for a particular invention in the US typically has superior rights over parties that file later. For this reason it is advantageous to pursue the filing of patent application on subject matter that is perceived to be of commercial value as soon as the basic ideas are sufficiently defined when patent protection is available.  When a startup pursues funding, a sale of the company or an initial public offering, it is inevitable that one of the checklist questions that will be asked is whether patent protection has been pursued so as to establish a barrier to entry of the marketplace by competitors. Frequently, the initial patent application filed will be a provisional patent application in recognition that the technology may evolve in the initial one-year period after the filing of the provisional application by which time a non-provisional application must be filed to preserve the priority date of the provisional application.  A failure to file a patent application within specified periods can result in a bar to a later filing and a loss of an ability to pursue patent protection which can detract from the perceived value of the company.

Name Clearance and Filing of Trademark Applications for Significant Trademarks
Prior to formalizing and registering a corporate or other entity, a name clearance search should be undertaken to determine if objections are likely to be raised by others with respect to the use or registration of the name by other business entities.  The costs associated with such clearance searches are generally considerably lower than the costs associated with changing a corporate name and rebranding activities that must be undertaken if a name change is later required due to a conflict with a preexisting business. Since at the outset most startups will not have used any marks in interstate commerce, they should consider filing applications for federal registration of significant trademarks based on an ”intent to use” the mark(s) in the future.  If it is determined by the U.S. Patent and Trademark Office that a mark is registrable, a Notice of Allowance is issued.  Once the mark is used in interstate commerce, a statement of use is filed and the registration is issued.   The inattention to the filing of trademarks can result in the adoption and registration of the marks by others and an inability to use the marks in conjunction with the business of the company.
 
Use of Non-Disclosure Agreements
Discussions with parties outside the company should be undertaken pursuant to non-disclosure agreements.  Such agreements obligate the recipient of confidential company information to maintain the information in confidence and limit the use of such information solely to the limited purpose specified in the agreement.  The failure to utilize non-disclosure agreements when disclosing sensitive company information to other parties can result in the loss of the right to file patent applications on inventions of the company in certain circumstances, the use of the company information in a manner adverse to the company, or the public disclosure of information that the company desired to maintain in confidence.

Should a startup pursue external funding or get to a point at which it is considering a liquidity event, due diligence investigations will be pursued to ascertain whether the company has taken appropriate steps to protect its intellectual property assets. A failure to assure that the above-identified housekeeping matters have been appropriately addressed can adversely affect the valuation of the company or the ability to achieve desired funding.

Is Your Software Invention Eligible for Patent Protection?

Under the patent laws, “Whoever invents or discovers any new or useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor…” While the statement of the law appears clear, its application to inventions embodied in software is anything but straightforward. 

Patent practitioners and clients alike have long sought clarification of when methods and systems embodied in software would be considered patent eligible, and when such methods will be viewed as directed to non-statutory subject matter for which patent protection is not available. It was hoped that an eagerly awaited Supreme Court decision in Alice Corp. Pty. Ltd. v. CLS Bank International, et al. (Alice Corp.) would provide such clarification. It did not.

           

What constitutes an “abstract idea?”

Though the statutory language that defines patent-eligibility is extremely broad, the courts have held that abstract ideas are one of the “basic tools of scientific and technological work” and that [M]onopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it.” The courts have held that abstract ideas are fundamental truths that are “part of the storehouse of knowledge of all men … free to all men and reserved exclusively to none.”

Without ever clearly defining what an abstract idea might be, in a string of cases leading up to the Alice Corp. decision, the courts concluded that various processes and systems that were implemented in software were directed to an “abstract idea” and thus, constituted patent-ineligible subject matter. 

While recognizing that computer implemented inventions are patent eligible just like any other machines and, that once programmed, a computer is a special purpose device just like any other machine, the courts have struggled with computer implemented inventions where the invention involves some form of calculations, the display of a result and data manipulation within a computer without more tangible results that extend beyond the execution of the computer software. 

The boundaries of patent-eligibility with respect to inventions embodied in computer software have remained unclear and decisions of the courts have been difficult to reconcile. Furthermore, while holding that computer related inventions that embody an abstract idea are patent ineligible, the courts have never clearly defined what constitutes an abstract idea.   

How is patent eligibility determined?

           

The Supreme Court in Alice Corp. stated that a two part test should be employed to ascertain whether claims are directed to patent-eligible subject matter.  First, a determination must be made as to whether the claims are directed to an “abstract idea.”  If the claims are directed to an abstract idea, an examination must next be undertaken to ascertain whether the claims contain an “inventive concept” sufficient to “transform” the claimed abstract idea into a patent-eligible application. 

The application of this test, however, in practice, is problematic. In the recent cases the courts have looked at the patent claim in question and distilled it into an “abstract idea.”  In this exercise, however, the courts have often ignored specific claim limitations and have focused on a high level objective of the claim, even if the patent claim could not be asserted at the level of breadth of the courts abstraction. In short, the conclusions reached by the courts regarding abstractness at times appear subjective and arbitrary.

In the Alice Corp. case, the Supreme Court stated that the involved claims were “abstract” because they were similar to claims considered in a prior case decided by the Court. Such logic provides little guidance to a practitioner that is attempting to assess whether a specific subject would be viewed as “abstract” if not directly analogous to subject matter previously considered by a court. 

Under the second part of the two part test discussed by the Alice Court, one must examine the claim to determine whether it contains an “inventive concept” sufficient to “transform” the claimed abstract idea into a patent-eligible application. The Court stated that this process requires more than simply stating the abstract idea while adding the words “apply it.”  However, the Court never defined what type of “transformation” would establish a qualifying “inventive concept” under the stated test.  A review of recent cases suggests that the second part of the two part test is more akin to a test based on obviousness rather than one directed at patent eligibility under the patent laws. 

Key takeaways

The Court intentionally did not enunciate a rule that precluded patentability of inventions embodied in software, but left the boundaries of patent eligibility ill-defined. Nonetheless, there are several takeaways from the Alice Corp. decision: 

1. Inventions that are solely embodied in software and simply display an output, manipulate data, or involve a calculation may be viewed as patent-ineligible. However, even in this category, prior cases would suggest that there are exceptions.

2. An invention claimed as a series of steps performed by computer software that are conventional steps recited at a high level of generality or well-known steps are not likely to be viewed as providing an “inventive concept” and thus, are likely to be held to be patent ineligible.

 

3. When an invention is embodied in computer software, one must be able to clearly articulate an “inventive concept.” Patent eligibility will not rest solely on the use of a computer to implement an otherwise known method or facilitate the operation of an otherwise known system. The software must do something other than what software running on a general purpose computer is known to do. 

4. Finally, if a claim is directed to subject matter that is viewed as being “abstract,” the claim will not be patent-eligible simply because it is limited to a particular technological field or application.

As with any inventions for which patentability is uncertain, one must weigh the potential value of obtaining patent protection and the attendant costs associated with such efforts against the risk that patent protection may be unavailable. For inventions that are embodied solely in software, the “clarifications” provided by Supreme Court in the Alice Corp. decision offer little new guidance to the practitioner and client as to the boundaries of patent eligibility.

As with many such issues, a determination regarding patent-eligibility is highly fact dependent. The details regarding the specific software system for which patent protection is desired in many cases permit a more informed view regarding patent-eligibility.