post-alice guideline 2016
TRANSCRIPT
Nutter McClennen & Fish LLP
Seaport West
155 Seaport Boulevard
Boston, Massachusetts 02210
Telephone 617.439.2000
www.nutter.com
Post-Alice Guideline
Lewis J. Lee
April 13, 2006
Before Alice Corp v. CLS Bank
35 U.S.C.§101
• Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title.
“include anything under the sun that is made by man“
• 1952 Patent Act Committee Report
2-Part Eligibility Test (Mayo-test)
• Determine if claim is directed to an exception
(a) law of nature, (b) natural phenomena, and (c) abstract idea
• Then, determine if additional elements “transform the nature of the
claim” into a patent eligible application, individually and /or as an
ordered combination
Nutter McClennen & Fish LLP • www.nutter.com 2
Alice Corp v. CLS Bank
U.S. Supreme Court (USSC), June 19, 2014 (9-0)
• Invalidated patent claims about the intermediated settlement
USSC holds that the claims of the patent:
• are drawn to the abstract idea of intermediated settlement;
• merely require generic computer implementation; and
• fail to transform the abstract idea into a patent eligible invention.
Two Parts Test
1) Determine whether claims are directed to an exception
2) If yes, determine whether there is an “inventive concept” – element
or combination of elements that is sufficient to ensure that the
patent claim is “significantly more” than the abstract idea
Aftermath of Alice Decision
After Alice decision
• USPTO established 2-part analysis for abstract idea
• Seeing more 101 rejections being tagged an 'abstract idea'
• Courts and PTAB applying Alice decision to invalidate claims
Nutter McClennen & Fish LLP • www.nutter.com 4
Impact of Alice to the Court
Before and After in District Court
Post-Alice Decisions (6/14-3/16, 21 mos)
Invalid Not Invalid Total Invalid (%)
Before 37 52 89 42%
After 147 75 222 66%
before (4/13-6/14), after (6/14-3/16)
Total Invalid % Invalid
Fed. Ct. 253 177 70.0%
Fed. Cir. 31 30 96.8%
Dist. Ct. 222 147 66.2%
PTAB CBM Institutions 114 96 84.2%
PTAB CBM Final 58 57 98.3%
* Data Source: Bilski Blog, Robert R. Sachs, Fenwick & West
Impact of Alice to the USPTO
§101 Rejections by Classification
§101 Rejections for Biz. Methods
Nutter McClennen & Fish LLP • www.nutter.com 6
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
1600-Bio, Genes & Chem
1700-Chemical Material Eng.
2100-Computer Architecture
2400-Networks, Video
2600-Communications
2800-Semicon, Elect.
3600-Trans, Const, BM
3700-Mechanical
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Jan-12 Oct-12 Aug-13 May-14 Jul-14 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15
3680
3690
* Data Source: Bilski Blog, Robert R. Sachs, Fenwick & West
Subject Matter Eligibility Flowchart
Nutter McClennen & Fish LLP • www.nutter.com 7
Step 1
Is the claim a
process, machine,
manufacture, or
composition of
matter?
Step 2A
A law of nature, a
natural phenomenon,
or an abstract idea?
(judicial exceptions)
Step 2B
Does the claim recite
additional elements
that amount to
“significantly more”
than the exception?
Eligible
Subject Matter
Not Eligible
Subject Matter
Yes
Yes
Yes
No
No
No
“Abstract Idea” in Alice decision
The Alice Court did not provide a definition of an
“abstract idea,” but
Appears to limit the “abstract idea” to be:
• A fundamental and long prevalent, and
• Well-known and widely used for long years.
• Such as, hedging or intermediated settlement
Hint #1: Distinguish from Alice-“abstract idea”
• Argue that the subject matter of the invention is relatively new
and/or confined to a specific technological field
• Argue that the invention provides a practical use
“Abstract Idea”?
Fundamental Economic Practices
Certain Methods of Organizing Human Activity
An Idea ‘of Itself’
• “can be performed in the human mind, or by a human using a pen
and paper.”
Mathematical relationships/formulas
Routine, Conventional, Well-known
General Computer + Software
• Considered as an abstract idea – almost always !
No bright line rule!
Nutter McClennen & Fish LLP • www.nutter.com 9
* red color types from USPTO guideline
December 2014 USPTO
Interim Eligibility Guideline (1)
If claim includes an abstract idea, determine whether
any claim element(s) is enough to make the claim
“significantly more” than the abstract idea itself
May be enough to include:
• Improvements to another technology or technical fields
• Improvements to the functioning of the computer
• Applying a judicial exception to a particular machine
• Transforming an article to a different state or thing
• Adding unconventional limitations that confine the claim to a
particular useful application
Nutter McClennen & Fish LLP • www.nutter.com 10
December 2014 USPTO
Interim Eligibility Guideline (2)
May be not enough to include:
• Merely implementing an abstract idea on a computer
• Applying well-understood routines or conventional activities to a
judicial exception (e.g., a claim to an abstract idea requiring no more
than a generic computer to perform generic computer functions that
are well understood, routine and conventional activities previously
known to the industry)
• Adding insignificant extrasolution activity to a judicial exception
(e.g., mere data gathering in conjunction with a law of nature or
abstract idea)
Nutter McClennen & Fish LLP • www.nutter.com 11
July 2015 Update on
Eligibility Guideline
Emphasis on considering all elements both individually
and in combination
MDC (markedly different characteristics) analysis stays
in Step 2A
Further information (i.e., court decisions) on
Identifying Abstract Ideas in Step 2A
Refine requirements of A Prima Facie Case
Highlight using the 2014 Interim Eligibility Guidance
Preemption and streamlined analysis
• “the absence of complete preemption does not guarantee that a claim
is eligible.”
Nutter McClennen & Fish LLP • www.nutter.com 12
Notable Court Decisions after Alice
Ultramercial v. Hulu (Nov. 14, 2014 @ U.S. App.)
DDR Holdings v. Hotels.com (Dec. 5, 2014 @ U.S. App.)
Allvoice Devs. v. Microsoft Corp (May 22, 2015, U.S. App.)
Internet Patents v. Active Network (Jun. 3, 2015, U.S. App.)
Klaustech v. Admob (Aug. 31, 2015, D. N. Cal. )
eDekka v. 3Balls.com (Sep. 21, 2015, D. E. Tex.)
Recognicorp v. Nintendo (Dec. 15, 2015, D. WA)
Nutter McClennen & Fish LLP • www.nutter.com 13
‘More’ is not Enough
Ultramercial v. Hulu (Nov. 14, 2014 @ U.S. App.)
• Patent No. 7,346,545 relates to methods for advertising including
restricting access to a media product for a consumer until seeing a
sponsor message and receive payment from the sponsor.
• Claim 1 comprises 11 details steps to describe interactions among
content provider, content distributor, consumer, and sponsor.
• Court invalidated ‘545 patent – not transformative
Hint #2: Just adding more stuffs does not guarantee
• Addition of a general computer and the Internet or a large number of
steps are not enough.
• “[A]ddition of merely novel or non-routine components to the
claimed idea” does not necessarily turn “an abstraction into
something concrete.” (Ultramercial at p.10)
Nutter McClennen & Fish LLP • www.nutter.com 14
eDekka v. 3Balls.com
Claim 1 of US 6,266,674
1. Method for storing information provided by a user which comprises:
in response to user input, receiving and storing information;
in response to user input, designating the information as data while
the information is being received;
in response to user input, designating at least a portion of the
information as a label while the information is being received;
in response to user input, traversing a data structure and providing
an indication of a location in the data structure;
in response to user input, storing the label at the location in the data
structure; and
associating the label with the data.
Nutter McClennen & Fish LLP • www.nutter.com 15
“Could be performed by a human”
eDekka v. 3Balls.com (Sep. 21, 2015, Dist. E Tex)
• eDekka contended that the claims are not an abstract idea because
they “improve the functioning of technology. . . . because it creates a
structure that reduces the time to retrieve information and the amount
of information that must be retrieved.”
• However, the Court found that representative claims 1 and 3 are
directed to an abstract idea of storing and labeling information.
• “[T]he claimed idea represents routine tasks that could be performed
by a human.”
Hint #3: Actual improvement is required
• Arguing improvements over the technology is not enough.
Nutter McClennen & Fish LLP • www.nutter.com 16
Is Software an Abstract Idea?
DDR Holdings v. Hotels.com (Dec. 5, 2014 @ U.S. App.)
• Patent 7,818,399: When a link is activated in a web browser, where
the link is associated with a commerce object, pull related
information from a storage, generate a page about the commerce
object, and transmit the generated page to the web browser.
• “[T]he claimed solution is necessarily rooted in computer technology
to overcome a problem specifically arising in the realm of computer
networks” (DDR at p. 20)
• Hardware in ‘399 claims is just a general computer. Still the court
found the claims patent-eligible.
Hint #4: The type of problem to solve matters.
• Improvements to a technology, a technical field, or the functioning of
the computer itself may be enough to be eligible.
Following DDR Holdings
Klaustech v. Admob (Aug. 31, 2015, Dist. N Cal. )
• Patent 6,128,651
– a non-scrolling ad display that provides a web page with a non-scrolling
ad frames where each ad frame has its own timer. Identity for the
browser and ad, and the timer timeout are recorded.
• Patent-eligible, similar to DDR Holdings
– “The patent attempts to address the prevailing problem of advertising on
the Internet to control advertising to each web page viewing browser and
to monitor accurately the timing of the display, with proof of the
advertisement display to the paying advertiser.”
• Note: consideration of patent eligibility pursuant to a motion to
dismiss should be limited to those cases where “the basic character
of the claimed subject matter is readily ascertainable from the face of
the patent.”
Nutter McClennen & Fish LLP • www.nutter.com 18
The Eligibility is in the Details
Internet Patents v. Active Network (Jun. 3, 2015, U.S. App.)
• Patent 7,707,505: An intelligent user interface that generates a web
page furnishing icons, where each icon is a hyperlink to a dynamic
online application form. The state of the dynamic online form is
determined by a user input.
• “[A] known idea, or one that is routine and conventional, is not
inventive in patent terms.” Invalid
Hint #5: Incorporate the details
• A well-known method that lacks the details of how the invention
executes its functions is not patent-eligible.
• DDR claimed an improvement to a computer networks and described
its workings in great detail.
Nutter McClennen & Fish LLP • www.nutter.com 19
One of the Four, not Something Else
Allvoice Devs. v. Microsoft Corp (May 22, 2015, U.S. App.)
• Claim 60. A universal speech-recognition interface . . . comprising:
input means for receiving speech-recognition data . . .;
output means for outputting the recognised words . . . .
• Invalidated claims 60 and 63 without using Alice 2 part analysis
• The Court found that the subject matter does not fall in the four
statutory categories, since “except for process claims, the eligible
subject matter must exist in some physical or tangible form.”
Hint #6 : Process? If not, use a tangible form
• The claims could be written in a processor configured to:
• For non-method claims, always include some form of physical
hardware.
Nutter McClennen & Fish LLP • www.nutter.com 20
Tweak to DDR Holdings
Recognicorp v. Nintendo (Dec. 15, 2015 W. Dist. WA)
• US 8,005,303 relates to methods and systems for encoding and
decoding image data. The method includes creating an image of a
face on a display by piecing together images of facial features (such
as hair or eyes), calculating a code for the composite image, and
reproducing that image on another display based on that code.
• Even though the invention tries to overcome problems specific to the
computer technologies, encoding/decoding and multiplication are not
enough to transform the subject to be patent-eligible.
• Note: The Court confirmed that claim construction is not “an
inviolable prerequisite to determining patent eligibility.”
Solving “a problem in computer networks” is not
enough to be patent-eligible.
Nutter McClennen & Fish LLP • www.nutter.com 21
USPTO Example #1: Isolating and
Removing Malicious Code from e-mail
1. A method, comprising:
receiving an electronic communication containing malicious code in a
computer having a quarantine sector and a non-quarantine sector isolated from
the quarantine sector:
storing the communication in the quarantine sector where code in the
quarantine sector is prevented from performing write actions in other memory
sectors;
extracting the malicious code from the electronic communication to create a
sanitized electronic communication, wherein the extracting comprises:
scanning the communication for a beginning malicious code marker;
flagging each scanned byte between the beginning marker and a successive
end malicious code marker
copying all non-flagged date bytes in a sanitized communication file
transferring the sanitized electronic communication to the non-quarantine
sector and deleting all data remaining in the quarantine sector.
Nutter McClennen & Fish LLP • www.nutter.com 22
PTO Analysis of Example #1
Step 1: Directed to a statutory category of invention?
Yes. The claim is directed to a process.
Step 2A:
No. The claim is directed towards physically isolating a received
communication on a memory sector and extracting malicious code
from that communication to create a sanitized communication in a new
data file. Such action does not describe an abstract concept, or a
concept. In contrast, the invention claimed here is directed towards
performing isolation and eradication of computer viruses, worms, and
other malicious code, a concept inextricably tied to computer
technology and distinct from the types of concepts found by the courts
to be abstract. Accordingly, the claim is not directed to any judicial
exception
Nutter McClennen & Fish LLP • www.nutter.com 23
USPTO Example #3:
Digital Image Processing
1. A computer-implemented method for halftoning a gray scale image,
comprising:
generating a blue noise mask by encoding changes in pixel values;
storing the blue noise mask in a first memory;
receiving a gray scale image and storing the gray scale image in a
second memory;
comparing with a processor on a pixel-by-pixel basis, each pixel of
the gray scale image to a threshold number in the corresponding
position of the blue noise mask to produce a binary image array; and
converting the binary image array to a half-toned image.
Nutter McClennen & Fish LLP • www.nutter.com 24
PTO Analysis of Example #3
Step 1: Directed to a statutory category of invention?
Yes. The claim is directed to a process.
Step 2A: Directed to a judicial exception?
Yes. The process includes encoding, storing data into a memory, and
comparing data, which are considered abstract. Therefore, the claim is directed
to an abstract idea.
Step 2B: Amounts to significantly more than the exception?
Yes. The steps of comparing blue noise mask to a gray scale image to
transform the gray scale image to a binary image and converting the binary
image array into a half-toned image add meaningful limitations to the abstract
idea of digital image processing and therefore “adds significantly more” to the
abstract idea (beyond mere computer implementation).
Also, the method improves the functioning of the computer by allowing the
computer to use less memory, which results in faster computation time.
Nutter McClennen & Fish LLP • www.nutter.com 25
USPTO Example #5:
Digital Image Processing
10. A method of generating a device profile that describes properties of
a device in a digital image reproduction system for capturing,
transforming or rendering an image, said method comprising:
generating first data for describing a device dependent transformation
of color information content of the image to a device independent color
space through use of measured chromatic stimuli and device response
characteristic functions;
generating second data for describing a device dependent
transformation of spatial information content of the image in said device
independent color space through use of spatial stimuli and device
response characteristic functions; and
combining said first and second data into the dev vice profile.
Nutter McClennen & Fish LLP • www.nutter.com 26
PTO Analysis of Example #5
Step 1: Directed to a statutory category of invention?
Yes. The claim is directed to a statutory category, because a series of steps for
generating data satisfies the requirements of a process (a series of acts).
Step 2A: Directed to a judicial exception?
Yes. the claimed method simply describes the concept of gathering and
combining data by reciting steps of organizing information through
mathematical relationships.
Step 2B: Amounts to significantly more than the exception?
No. The claim does not include additional elements beyond the abstract idea
of gathering and combining data. Therefore, the claim does not amount to
significantly more than the abstract idea itself.
Nutter McClennen & Fish LLP • www.nutter.com 27
USPTO Example #21-1:
Transmission of Stock Quote Data
1. A method of distributing stock quotes over a network to a remote subscriber
computer, the method comprising:
receiving stock quotes at a transmission server sent from a data source over the
Internet, the transmission server comprising a microprocessor and memory that
stores the remote subscriber’s preferences for information format, destination
address, specified stock price values, and transmission schedule, wherein the
microprocessor
filters the received stock quotes by comparing the received stock quotes to the
specified stock price values;
generates a stock quote alert from the filtered stock quotes that contains a stock
name, stock price and a universal resource locator (URL), which specifies the
location of the data source;
formats the stock quote alert into data blocks according to said information
format; and
transmits the formatted stock quote alert to a computer of the remote subscriber
based upon the destination address and transmission schedule.
Nutter McClennen & Fish LLP • www.nutter.com 28
PTO Analysis of Example #21-1
Step 1: Directed to a statutory category of invention?
Yes. The claim recites a series of acts for distributing stock quotes to selected
remote devices. Thus, the claim is directed to a process, which is one of the
statutory categories of invention .
Step 2A: Directed to a judicial exception?
Yes. The claim recites the steps of receiving, filtering, formatting and
transmitting stock quote information. This is simply the organization and
comparison of data which can be performed mentally and is an idea of itself.
Step 2B: Amounts to significantly more than the exception?
No. The claim recites additional limitations of a microprocessor, memory and
transmitter. However they are to simply perform the generic computer
functions of receiving, processing and transmitting information. Generic
computers performing generic computer functions, alone, do not amount to
significantly more than the abstract idea.
Nutter McClennen & Fish LLP • www.nutter.com 29
USPTO Example #21-2:
Transmission of Stock Quote Data
2. A method of distributing stock quotes over a network to a remote subscriber computer, the method
comprising:
providing a stock viewer application to a subscriber for installation on the remote subscriber computer;
receiving stock quotes at a transmission server sent from a data source over the Internet, the
transmission server comprising a microprocessor and a memory that stores the remote subscriber’s
preferences for information format, destination address, specified stock price values, and transmission
schedule, wherein the microprocessor
filters the received stock quotes by comparing the received stock quotes to the specified stock price
values;
generates a stock quote alert from the filtered stock quotes that contains a stock name, stock price and
a universal resource locator (URL), which specifies the location of the data source;
formats the stock quote alert into data blocks according to said information format; and
transmits the formatted stock quote alert over a wireless communication channel to a wireless device
associated with a subscriber based upon the destination address and transmission schedule,
wherein the alert activates the stock viewer application to cause the stock quote alert to display on the
remote subscriber computer and to enable connection via the URL to the data source over the Internet
when the wireless device is locally connected to the remote subscriber computer and the remote
subscriber computer comes online.
Nutter McClennen & Fish LLP • www.nutter.com 30
PTO Analysis of Example #21-2
Step 1: Directed to a statutory category of invention?
Yes. The claim recites a series of acts for distributing stock quotes to selected
remote devices. Thus, the claim is directed to a process, which is one of the
statutory categories of invention .
Step 2A: Directed to a judicial exception?
Yes. The claim recites the steps of receiving, filtering, formatting and
transmitting stock quote information. This is simply the organization and
comparison of data which can be performed mentally and is an idea of itself.
Step 2B: Amounts to significantly more than the exception?
Yes. The claimed invention addresses the Internet‐centric challenge of alerting
a subscriber with time sensitive information when the subscriber’s computer is
offline. This is addressed by transmitting an alert to activate the stock viewer
application, which causes the alert to display and enables the connection of the
remote subscriber computer to the data source over the Internet when the
remote subscriber computer comes online.
Nutter McClennen & Fish LLP • www.nutter.com 31
USPTO Example #24:
Updating Alarm Limits
1. A method for updating the value of at least one alarm limit on at least one
process variable involved in a process comprising the catalytic chemical
conversion of hydrocarbons wherein said alarm limit has a current value of B0+K
wherein B0 is the current alarm base and K is a predetermined alarm offset which
comprises:
(1) Determining the present value of said process variable, said present value
being defined as PVL;
(2) Determining a new alarm base B1, using the following equation:
B1= B0(1.0‐F) + PVL(F)
where F is a predetermined number greater than zero and less than 1.0;
(3) Determining an updated alarm limit which is defined as B1+K; and
thereafter
(4) Adjusting said alarm limit to said updated alarm limit value.
Nutter McClennen & Fish LLP • www.nutter.com 32
PTO Analysis of Example #24
Step 1: Directed to a statutory category of invention?
Yes. Thus, the claim is directed to a process, which is one of the statutory
categories of invention .
Step 2A: Directed to a judicial exception?
Yes. The limitations of updating alarm limits using a formula is a judicial
exception, because mathematical relationships have been characterized by the
courts as abstract ideas, even though the formula is novel.
Step 2B: Amounts to significantly more than the exception?
No. The preamble specifies the field of use, which is catalytic conversion of
hydrocarbons, but in this case imposes no limits on the process of calculating
an alarm limit value using the specified equation. Without explaining how to
select variables, set off an alarm, or adjust the alarm limit, the steps merely
calculate a result using a novel equation and do not add any meaningful limits
on use of the equation.
Nutter McClennen & Fish LLP • www.nutter.com 33
HINTS AND TAKEAWAYS (1)
Add specific technical limitations to the claims
• Draft claims to show improvement to the functioning of a computer, or
general purpose computer is configured into a specific purpose computer
Distinguish from Alice-“abstract idea”
• Argue that the subject matter of the invention is relatively new and/or
confined to a specific technological field.
• Argue claims provide improvement to the technical field to which the claims
are applied.
• If possible, argue that claims could not be performed without the specialized
components of the claims.
Do not leave critical features in dependent claims
• When an independent claim is invalidated, the Court routinely invalidates its
dependent claims also.
Nutter McClennen & Fish LLP • www.nutter.com 34
HINTS AND TAKEAWAYS (2)
Draft specifications and claims so that they are clearly directed to a
technical solution to a technical problem
Draft application with full and deep technical details
• Use technical terms in claim, as opposed to business method terms (e.g., use
“multimedia content file” instead of “advertisement”).
• Always include hardware support in the specification.
• Improvements to a technology, a technical field, or the functioning of the
computer itself may be enough to be eligible.
Avoid pure functional claims – incorporate some form of hardware
(e.g., a processor or a memory)
Request to consider all elements both individually and in
combination
Discuss with the Examiner – Interview Helps !
Nutter McClennen & Fish LLP • www.nutter.com 35
Reference
USPTO 2014 Interim Guidance of Patent Subject
Matter Eligibility
USPTO July 2015 Update on Subject Matter
Eligibility
Bilski Blog, Robert R. Sachs, Fenwick & West
Patent Eligibility Post-Alice: Practical Advice for
Navigating the Current 35 USC §101 Regime
- AILPA Seminar on Jan. 20, 2016
BACKUP SLIDES
Nutter McClennen & Fish LLP • www.nutter.com 38
Alice Guideline:
2-Part Analysis for Abstract Idea
Step 1: Perform the statutory category test
• If a claim is not directed to one of the four statutory categories (i.e., process, machine, manufacture, or composition of matter), reject the claim
Step 2A: Determine whether the claim is directed to an abstract idea
• Examples: fundamental economic practices, certain methods of organizing human activities, an idea itself, or mathematical formula
Step 2B: If so, determine whether the claim amounts to “significant more” than the abstract idea itself
• Improvements to another technology or technical fields;
• Improvements to the functioning of the computer itself; or
• Meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment7