Seeking Patent Protection on Computer Implemented Inventions? Disclose the Specific Algorithms Employed in the Implementation

I commented in a prior blog on the lack of clarity in the patent law with respect to the patent eligibility of computer-implemented inventions.  Recent cases reflect an even further tightening of the rules with respect to computer-implemented inventions and suggest that practitioners may need to reconsider the content that should be included in patent applications directed to such inventions.

Historically, the courts in the U.S. have held that “[t]he specification [of a patent] need not teach what is well-known in the art.”  The rationale for these decisions seemed to make sense.  Requiring a patent applicant to reiterate that which was well known in the field would simply increase the cost of preparing patent applications and would convey nothing new.  As a consequence, it has been a common practice not to include subject matter that was well known in the field.  Patent practitioners, at times, would expressly state that specific information was not being included because it was well known.  Recent cases suggest that this practice needs to be revisited.

A Recent Case Invalidates Claims for Failing to Adequately Disclose an Algorithm for Performing a Claimed Function

The Court of Appeals for the Federal Circuit recently issued a decision in which it invalidated a patent as indefinite for failing to adequately disclose an algorithm employed in a computer-implemented invention. Triton Tech of Texas, LLC v. Nintendo of America, Inc., 111 USPQ2d 1396 (Fed. Cir. 2014). There was no dispute that algorithms for performing the claimed invention were well known.  Nevertheless, the Court held the claims of the patent invalid as indefinite for failing to adequately disclose in the patent specification a specific algorithm for performing the well-known function.

How Means-Plus-Function Analysis Impacted the Case

The decision of the Court was directed to a claim element drafted in “means-plus-function” form.  Claims written in “means-plus-function” form recite a means for performing a particular function without describing any structure to perform the function.  While there is no structure recited in a claim element written in means-plus-function form, under the U.S. patent laws, an element of such a claim is construed to cover the corresponding structure described in the patent specification and equivalents thereof.  The Court reasoned that because the patent specification did not disclose a specific algorithm for performing the claimed function, even though many such algorithms for performing this function were well known in the field, the patent failed to disclose any structure in the patent specification that corresponded to the claimed function and thus failed to meet the statutory requirement.  Based on this logic, the court held the patent claims invalid as indefinite.
 
The Algorithms for Performing a Claimed Function Should be Disclosed in the Patent Specification for Computer-Implemented Inventions

To avoid the fate suffered by the patent owner in this recent case, the specific algorithms, steps and/or techniques employed in computer-implemented inventions should be disclosed in the patent specification, even in circumstances in which the disclosure involves subject matter that is considered well known in the art.  This is particularly important in patent applications that include claims written in means-plus-function form.

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.       

Design Patents and Product Appearance

In the world of industrial design and branding, the appearance or look and feel of a product can be subject to various forms of intellectual property (IP) protection. Copyrights and trademarks usually come to mind when considering the appearance, imagery or look and feel of a product, but design patent protection should not be overlooked and can provide an important avenue for protection. The saga of the cellphone litigation wars has brought to greater prominence the use of design patents on product appearance.

As stated in the patent statute, a design patent can be obtained for "a new, original and ornamental design for an article of manufacture." Most products are certainly articles of manufacture, and the appearance of a product—or portions of a product or its decoration—can be the subject of a design patent. Static and dynamic graphics and logos as displayed on a cellphone screen or other display may also be the subject of a design patent.

One form of IP protection does not exclude the other forms. Often, design patents, copyrights and trademarks can be used in concert to protect aspects of product appearance. As an example, a product shape may be design patented and also trademarked if the shape or trade dress of the product serves to identify the product source, such as the original Coca-Cola bottle. Or a product shape may be both copyrighted and design patented for its ornamental or artistic appearance.

A practical benefit of a design patent is the relative ease of obtaining one at relatively low cost. Examination of design patent applications by the United States Patent and Trademark Office is less than rigorous and most applications proceed to grant.

While a design may be subject to both patent and copyright protection, design patents offer benefits not available for copyrights. One notable benefit is that a design patent can be infringed with no proof of copying as required under the copyright law. A patented design is infringed if to an ordinary observer an accused design appears substantially the same. Another beneficial difference is that the fair use defense is not available to an accused design patent infringer, as it is for copyrights.

One should therefore consider design patents as one mode of protection for product appearance as well as copyright and trademark modes.

Where Should Foreign Patent Protection Be Pursued?

Once a client has made a decision to file a patent application, invariably, at some point during the patent procurement process, assuming foreign protection is not barred, the client will be asked whether it desires to pursue patent protection for the invention in foreign countries. Patents are territorial and have no applicability outside of the country in which they are granted. A United States patent would afford no protection in a foreign country against a competitor that manufactured, in a foreign country, a product covered by the claims of the United States patent and sold such products outside of the United States. Generally, to prevent manufacture, use or sale in any given country one must obtain a patent in the respective country.

The pursuit of patent protection in foreign countries is costly. With exceptions involving the filing of regional patent applications subsequently discussed, it is necessary to file and prosecute a separate patent application in each country in which patent protection is desired. To file a patent application in a foreign country, a foreign associate that is licensed to practice in the respective jurisdiction must be engaged and translations of original patent applications must be obtained for filing in non-English speaking countries. Thus, the costs involved in the pursuit of foreign protection in each country include the professional fees of the U.S. attorneys and the respective foreign associate, as well as the government fees. It is not uncommon for the prosecution of a single patent application in a foreign country to involve an investment of $10,000-$20,000 or more with no assurance that the patent will necessarily be granted.

A European patent application may be filed in the European Patent Office (EPO). The European patent application is an example of one notable regional application that affords the benefit of a single examination of the application that is accepted by all of the member states. The filing costs for an EPO application can be significantly higher than direct filings in most individual European countries but the ability to pursue a single examination in the EPO can provide cost savings if patent protection in multiple countries in Europe is sought. Furthermore, filing in the EPO affords flexibility with respect to the member states in which protection is finally obtainable since the decision to select the European countries in which a patent will be granted may be deferred until after the grant of the European application by the EPO.

So, with that background, the question remains where should foreign patent protection be pursued? No companies seek patent protection in all countries since to do so would be cost prohibitive. Moreover, it may not be an effective strategy to file in a country where a competitor would only be expected to manufacture a competitive product since the competitor could elect to manufacture the product in another country where no patent protection had been obtained. The most reasonable course of action often involves determining which jurisdictions represent the most significant markets and pursuing patent protection in those jurisdictions.

Finally, it is often desirable to file a Patent Cooperation Treaty (PCT) application to preserve foreign filing opportunities. A PCT application may be filed as the first filed application or within one year of a patent application on which it relies for priority. The PCT application never issues as a patent, but rather, is a placeholder that defers the deadline by which applications in foreign countries (“national phase applications”) must be filed. In most cases the filing of a PCT application permits the deferral of the timeframe in which to file a national phase application up to 30 months from the priority date of the earliest filed application.

The deferral of the filing of foreign applications by utilizing the PCT process offers several benefits:

1. The filing costs associated with national phase applications are delayed, which is helpful to many startups and growing companies for cash flow reasons.
2. The deferral of national phase filings affords the applicant more time to assess which markets are likely to be significant and which are not. As a result, filings in certain countries along with the attendant costs may be avoided based on observations of the marketplace that become evident over time whereas a broader filing strategy may have originally been felt necessary in the absence of actual market data.
3. The deferral of foreign filings via a PCT application permits the filing of national phase applications in any PCT member state well beyond the timeframe in which direct filings would otherwise need to be made. As a consequence, startups and small companies contemplating a liquidity event may be able to defer significant filing and prosecution costs for foreign applications until a time when another party with deeper pockets assumes responsibility for the applications or until a time when financial resources are more plentiful. Additionally, it is often beneficial for a company contemplating a sale of the business to file a PCT application even if it does not have significant foreign markets since a potential acquirer may value the ability to obtain patent protection in major foreign markets of the potential acquirer.

Viewed in the above framework, a decision can be made as to where and how foreign patent protection should be pursued in a cost-effective manner.

Recent Trends in Global Trademark Publications

A recent study indicates that in 2013 China again held the title of most trademark applications published by a national trademark office in a given year.  And, while the United States retained its hold on the number two position, Brazil saw major increases in published trademark applications in 2013 and claimed third place.

The data, published by Thomson Reuters® and culled using its SAEGIS® on SERION® trademark search platform, finds some shuffling in the ranks of the top ten trademark publishers for 2013.  Canada, Germany, and the United Kingdom fell out of the top ten, while India, Mexico and Taiwan took their places.  And while most of the top ten saw fairly steady numbers of trademark publications compared to the previous year, both South Korea and Brazil saw marked increases in 2013.  Aside from those already mentioned, the top ten countries include Turkey, Japan, and France.

A word on methodology: since China requires a separate trademark application for each class of goods or services for a given mark, unlike other countries that allow multi-class applications, one cannot compare the gross number of publications alone.  Rather, Thomson Reuters looked at the number of discrete marks that were published in a given year.  In other words, if a mark was published in three classes in China, it would still count as one published mark for purposes of this study.

Taking a closer look at the data, China saw an almost five-fold increase in the number of published marks from 2007 to 2010, to a peak of approximately 1.2 million published marks.  The numbers fell back in 2011 to under 1 million, and fell further to some 860,000 published marks in 2013.

In the U.S., publications fell off a bit in 2009 and 2010, compared to previous years, which would be consistent with a decline in filings in the immediate aftermath of the recession that began in 2008.  The numbers have been fairly steady over the past three years, at about 325,000 publications per year.

The biggest increases in the number of publications from 2012 to 2013 were found in Brazil, South Korea and Turkey.  Thomson Reuters reports a 53% increase in publications in Brazil last year, a 23%  increase in South Korea, and about an 18% increase in Turkey.  While we do not have empirical evidence to back this up, one wonders if the 2014 FIFA World Cup® and 2016 Summer Olympic Games have contributed to the increase in Brazilian publications.

While it is interesting to see how the gross numbers of published marks compare between countries, it is important to note that the most popular classes of goods and services vary from country to country.  In China, the most popular class for published trademark applications in 2013 was International Class 25, which includes clothing, footwear, and headgear.  Second place in China was Class 35: advertising and business management.

In the United States, most trademark applications were published for goods in Class 9, which includes scientific, photographic, measuring and signaling instruments.

Interestingly, in Turkey, France, and Brazil, the most popular class was Class 35: advertising and business management.  This class was also the most popular world-wide in 2013.

This data suggests that there is a lot of interest in protecting brands in developing economies, and that at least for the near term we expect this trend to continue.  The more challenging task is identifying the countries that will see new or continued growth in filings.

[All trademarks used in this article are the property of the respective owner.]

Sometimes, It's Just the Simple Things

While I was in law school, I had the opportunity to work as a part-time law clerk for a patent law firm.  I helped to prepare responses to office actions, perform legal research and search prior art patents.  I was going to law school full-time after having been an engineer for over eight years so this was some of my first exposure to what being a patent attorney was going to be like.

One project involved reviewing patents in the areas of car alarms and anti-theft technology.  This was last century, back in the early 90s, so many of the patents came from a time before the proliferation of mobile phones, tablets and (gasp!) the internet.  There were references to car phones but they were described as being the size of a shoe box and built right in.

I do remember coming across one patent where the inventor had used the original stereo speakers as the basis for retro-fitting a car with an alarm system that included a motion sensing component.  The inventor connected to the voice coils on the speakers and used the speaker cones as the vibration sensors.  For those readers who might not understand how a speaker works, normally the speaker voice coil is driven by an input signal, e.g., music, which causes the speaker cone to vibrate, which results in sound.  This inventor, however, realized that the speaker could be used “in reverse” in that whenever the speaker cone is shaken, for example, when the car is being broken into or moved, it will cause a signal on the voice coil and that signal can be detected.  As a result, each of the speakers in the car became a vibration sensor as part of an anti-theft system without the need for extensive re-working or running of wires.
 
I thought that was a very elegant solution.  Now, that may just be my geek flag flying, but I realized then that an invention doesn't have to be super complex to merit protection.  There was something about this “simple” solution to a problem that earned it my respect.

I believe that this is something that we should all keep in mind.  When you are conducting your patent harvesting reviews, i.e., evaluating your technology and deciding what might be the subject of a patent application to add to your portfolio, you should keep in mind that it's not always just the most complex ideas or technology that merit a patent application.  Those “simple,” but important, concepts also may need to be protected.

Trade Secrets and Economic Espionage

On April 29, 2014, U.S. Senators Orrin Hatch (R-Utah), the former Chairman and a current member of the Senate Judiciary Committee, and Chris Coons (D-Del.), a member of the Senate Judiciary Committee, introduced the Defend Trade Secrets Act of 2014 [the “DTSA”].  The DTSA is a bipartisan bill that proposes to amend the Economic Espionage Act of 1996 [the “EEA”] to create the first federal private right-of-action for theft of trade secrets.

Trade secret theft is on the rise.  According to Senators Hatch and Coons, theft of corporate trade secrets results in an estimated loss of $160 billion to $480 billion each year in the United States.  In this information age, trade secrets may be vulnerable to theft by a few keystrokes from a remote location, compared to the bygone era when trade secret theft may have required accessing and photocopying paper documents stored under lock and key.  Trade secrets are increasingly stolen at the direction of a foreign government or to benefit a foreign competitor.  “The intellectual property that drives the U.S. economy has never been more valuable, or more vulnerable,” according to Senator Coons.  “American companies are losing jobs because of the theft of trade secrets every day.”

Currently, trade secret misappropriation claims are generally brought under state laws.  Trade secret laws vary from state to state, which can create problems for trade secret owners and make it difficult for U.S. companies to develop uniform policies.  Although the EEA made trade secret theft a federal crime, federal criminal laws do not appear to have successfully stemmed the tide.  The Department of Justice brought only 25 cases of criminal trade secret theft in 2013.
 
The availability of a federal civil cause of action may harmonize U.S. trade secret law, enable companies to develop a unified set of nondisclosure policies with federal protection, create a uniform standard for trade secret misappropriation, and facilitate access to federal courts.  The DTSA bill would arm trade secret owners with federal rights and remedies, including:

• ex parte orders to preserve evidence and seize property;

• injunctions or royalties in lieu of an injunction;

• damages for actual loss plus unjust enrichment to the extent not compensated by an award of actual loss, or a reasonable royalty in lieu of damages measured by other methods; 

• potential treble damages for willful or malicious trade secret misappropriation; and

• reasonable attorney fees for willful and malicious misappropriation, bad faith claims of misappropriation, or motions to terminate an injunction made or opposed in bad faith.

Rapid changes in technology and increases in employee turnover in today’s job market warrant appropriate measures to preserve and protect trade secrets.  This federal legislation may help companies protect their valuable trade secrets, but trade secret owners will need to continue to rely on state laws for the time being.