Changes in Patent Language to Ensure Eligibility Under Alice

By Peter Glaser and William Gvoth

December 6, 2017- When a rule becomes a target, it ceases to be a good rule.  In the three years since the Supreme Court issued its opinion in Alice, there have been positive changes to patent applications, but there remains a long-term risk that patent practitioners will use tricks to beat the Alice test.  Here, we focus on the changes to patent applications by drafters, as well as changes to patent applications that have issued since Alice.

*Please note, citations were inadvertently omitted from the original publication of this article. Please contact the authors, directly, to obtain a version of this article including citations*

READ MORE>

Trading Technologies International, Inc. v. CQG, Inc.

By William Gvoth

November 16, 2017- Trading Technologies International, Inc. v. CQG, Inc. relates to abstract ideas under § 101.  In Trading Technologies, two patents were at issue: U.S. Patent Nos. 6,772,132 (’132) and 6,766,304 (’304) (referred to collectively as “patents”).  These patents shared a common specification and related to a method and a system for electronic trading of stocks, bonds, futures, options and similar products.  The patents describe a problem that arises when a trader attempts to enter an order at a particular price but misses the price because the market moved before the order was entered.  The patents describe implementations that reduce the time it takes for a trader to place a trade when electronically trading on an exchange and that improve the way information is displayed to the trader.  For example, the implementations display market depth, which moves visually up/down and left/right as the market for a product fluctuates.  In addition, the implementations described in the patents permit a user to place an order for a product via a click on a user interface.

Trading Technologies appealed, to the Federal Circuit, the decision of the District Court for the Northern District of Illinois (District Court), finding that the patents were directed to patent-eligible subject matter under the two step test from Alice Corporation Pty. Ltd. v. CLS Bank International (Alice), 573 U.S., 134 S. Ct. 2347 (2014).  The Federal Circuit affirmed.

To analyze the patent eligibility of the patents, the Federal Circuit selected claim 1 of the ’304 patent as the representative claim.  At a high level, claim 1 of the ’304 patent was directed to “a method for displaying market information relating to and facilitating trading of a commodity being traded in an electronic exchange…on a graphical user interface” that comprised dynamically or statically displaying various information and submitting a trade based on a user selection of a portion of the user interface.

The Federal Circuit analyzed the District Court’s analysis of the representative claim under the two step test from Alice.  Under the first step, the Federal Circuit reviewed, and agreed with, the District Court’s findings that the patents solve problems of prior graphical user interface devices used for computerized trading.  Specifically, the Federal Circuit stated that “the patents describe a trading system in which a graphical user interface ‘display[s] the market depth of a commodity traded in a market” including various static and dynamic displays and this graphical user interface solves “‘problems of prior graphical user interface devices…relating to speed, accuracy and usability.’”  Further, the Federal Circuit referenced the District Court’s findings that “the challenged patents do not simply claim displaying information on a graphical user interface” but rather “require a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface’s structure that is addressed to and resolves a specifically identified problem in the prior state of the art.”  Based on the reasons stated by the District Court, the Federal Circuit agreed that the patents presented patent-eligible subject matter.

The Federal Circuit then analyzed the District Court’s analysis of the representative claim under the second step of the test from Alice and concluded that the District Court correctly “determined that the challenged claims recite an ‘inventive concept.’”  The Federal Circuit agreed with the District Court’s identification of the feature of “the static price index as an inventive concept” that permits more efficient and accurate trade placement when using electronic trading systems.  In addition, Federal Circuit agreed with the District Court’s distinction of the trading system from a conventional computer or the Internet based in part on the idea that the trading system presents “specific technologic modifications to solve a problem or improve the functioning of a known system.”

One of the main takeaways from the Federal Circuit’s analysis is that the claimed graphical user interface addresses specific problems with prior art graphical user interfaces in electronic trading.  In other words, the claimed invention includes an improvement to the functioning of technology and steps that address a specific problem.  This decision highlights the importance of framing a problem solved by an invention in technical terms and then presenting claims that solve the problem.

Download Trading Technologies International V CQG Inc.

Practice Insights in the Wake of Sonix Technology Co., LTD., v. Publications International, LTD

By Kris Rhu

October 30, 2017-  In Sonix Technology Co., LTD., v. Publications International, LTD (Fed. Cir. Jan. 5, 2017), the Federal Circuit found that the term at issue in U.S. Patent No. 7,328,845, i.e. “visually negligible,” did not render the asserted claims indefinite under 35. U.S.C. § 112, second paragraph.

The decision provides insight into how terms of degree in claims are treated and how the specification can be useful in providing an objective baseline in interpreting such terms.

The ‘845 patent of Sonix is directed to using a graphical indicator (e.g. a matrix of small dots) to encode information on the surface of an object, and an optical device that can read the graphical indicator and output additional information.  An example application is a children’s book with icons, where if one scans an icon (e.g. a horse) with the optical device, the book will output a sound (e.g. pronunciation of “horse”).  The patent admits that encoding graphical indicators is not new (e.g. barcode on a book cover), but the invention is an improvement over conventional methods because it renders the graphical indicators “visually negligible.”

The district court granted summary judgment against Sonix finding the patent invalid as being indefinite.  Particularly, the district court found the term “visually negligible” in the claim as indefinite under 35. U.S.C. § 112, second paragraph because the term was “purely subjective” and because the claim language provides no guidance on its meaning.  The court also determined that the specification does not provide a person of ordinary skill in the art “with a meaning that is reasonably certain and defines objective boundaries” of the claim scope.

On appeal, Sonix argued that the requirements and examples in the specification would have allowed a skilled artisan to know the scope of the claimed invention with reasonable certainty and establish that the term depends on human perception, not opinion.  They argued that this was consistent throughout the initial examination and reexamination processes.  Publications argued that there is no objective standard to determine whether something is “visually negligible” because it depends on the vagaries of a person’s opinion.

The Federal Circuit agreed with Sonix and reversed the district court, citing Enzo Biochem, Inc. v. Applera Corp., 599 F. 3d 1325, 1336 (Fed. Cir. 2010), where the court found that the clause “not interfering substantially” did not render a claim indefinite because the intrinsic evidence provided examples for non-interfering structures and criteria for their selection.  Thus, sufficient guidance was given to allow a skilled artisan to compare a potentially infringing product with examples from the specification to determine whether interference is “substantial.”

The court also cited Datamize, LLC v. Plumtree Software, Inc., 417 F. 3d 1342, 1348-1349 (Fed. Cir. 2005), where the court found the term “aesthetically pleasing,” with respect to a look and feel for interface screens, indefinite because the specification provided no guidance to a person making aesthetic choices.  Without any guidance, a determination of whether something is “aesthetically pleasing” was completely dependent on a person’s subjective opinion.

The court further cited Interval Licensing, LLC v. AOL, Inc., 766 F .3d, 1364, 1368 (Fed. Cir. 2014), where the court found displaying content “in an unobtrusive manner that does not distract a user” indefinite because the single example in the specification without more information leaves the skilled artisan to wonder what other forms of display are unobtrusive and non-distracting.  This leaves the skilled artisan to consult the “unpredictable vagaries of any one person’s opinion.”

Here, the Federal Circuit found that the term “visually negligible” does not depend on a person’s taste or opinion, but rather depends on whether something can be seen by the normal human eye.  The court found that this provides an “objective baseline” to interpret the claim, and thus, is not “purely subjective” even though it may be a term of degree.  When turning to the specification to determine whether there is some standard for measuring visual negligibility, the court found that the specification 1) has a general exemplary design for a visually-negligible indicator, 2) states “requirements for the graphical indicators [to be] negligible to human eyes”, and 3) contains two specific examples of visually negligible indicators.  Thus, the court found the existence of examples in the specification distinguishes this case from Datamize, and the existence of an additional example and specific requirements distinguishes the case from Interval Licensing.  The court also found the level of detail in the specification to be closer to that provided in Enzo because it provided guidance on how to create visually negligible indicators and specific examples that provide points of comparison for the result.  Further, the court found that Publications had not provided evidence that human perception varies so significantly that reliance on it as a standard renders the claim indefinite, noting that no one involved in the first or second reexamination had any difficulty in determining the scope of the term “visually negligible.”

The Federal Circuit made one final point about how their holding in this case does not necessarily mean that “the existence of examples in the written description will always render a claim definite, or that listing requirements always provide sufficient certainty.”  The court indicated that they simply held that “visually negligible” is not purely a subjective term and that the written description and prosecution history provided sufficient support to inform with reasonable certainty those skilled in the art of the scope of the invention.

Going forward, the decision provides some instruction regarding potential patent drafting strategies with regard to terms of degree.  For example, the decision highlights the importance of providing sufficient requirements and examples in the written description so that sufficient guidance is provided to those skilled in the art for interpreting such terms.

Download Practice Insights in the Wake of Sonix Technology Co., LTD., v. Publications International, LTD.

Practice Insights in the Wake of Visual Memory LLC v. NVIDIA Corp.

By Sean Quinn & Peter Glaser

August 25, 2017- In Visual Memory LLC v. NVIDIA Corp. (Fed. Cir. Aug. 15, 2017), a divided panel at the Federal Circuit determined that U.S. Patent No. 5,953,740 is not directed to an abstract idea.

The decision provides a positive result in the context of software-based inventions, and provides a few insights regarding potential patent drafting strategies.  Namely, the decision highlights the importance of focusing the specification on improvements to hardware components, and bolsters the importance of mentioning technical benefits wherever appropriate.  

The ‘740 patent teaches a memory system having programmable operational characteristics that are capable of being configured for use with multiple different types of processors without causing a reduction in performance ostensibly present in the prior art computer systems.  This enables the memory system to be used efficiently with multiple types of processors, rather than only with a single type of processor.  Further, the ‘740 patent claims a computer memory system comprising a main memory, a cache, and programmable operational characteristics that determine a type of data stored by the cache.

On appeal from a district court’s grant of NVIDIA’s motion to dismiss based on the asserted claims being directed to patent -ineligible subject matter, Judge Stoll, writing for the majority, stated that “[courts] must articulate with specificity what the claims are directed to (citing Thales Visionix Inc. v. United States),” and “ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea (citing Enfish LLC v. Microsoft).”  (Opinion at 7).

Using Enfish and Thales as guidance, the majority stated that the ‘740 patent’s claims are directed to an improved computer memory system rather than to an abstract idea of categorical data storage and  mentioned that claim 1 of the ‘740 patent requires a memory system “having one or more programmable operational characteristics, said characteristics being defined through configuration by said computer based on the type of said processor,” and “determin[ing] a type of data stored by said cache.”  (Opinion at 9).  Further, the  majority stated that dependent claims 2 and 3, respectively, narrow the memory system’s programmable operational characteristic to storing certain types of data and buffering data from certain sources and that none of the claims recite all types and all forms of categorical data storage.

The majority noted that the ‘740 patent’s specification mentions various technical benefits associated with the memory system, such as permitting different types of processors to be installed with the subject memory system without significantly compromising their individual performance, obviating the need to design a separate memory system for each type of processor, avoiding the performance problems of prior art memory systems, enabling interoperability with multiple different processors, and outperforming prior art memory systems having larger cache sizes.

Analogizing the ‘740 patent to the self-referential table in Enfish and the motion tracking system in Thales, the majority noted that the ‘740 patent’s claims are directed to a technological improvement and focus on a specific asserted improvement in computer capabilities rather than a process that qualifies as an abstract idea for which computers are invoked merely as a tool.  Further, the majority noted that the specification of the ‘740 patent discusses the advantages offered by the proffered technological improvement.  

Juxtaposing the ‘740 patent and the claims in Content Extraction & Transmission LLC v. Wells Fargo Bank and In re TLI Communications LLC Patent Litigation, the majority noted that the ‘740 patent recites an ostensibly new, improved, and more efficient memory system as opposed to claims that are not directed to an improvement in computer functionality and cover abstract ideas operating on generic hardware.

In dissent, Justice Hughes posited that the ‘740 patent fails to describe how the invention’s purpose is achieved, fails to describe how to implement the programmable operational characteristic, requires a third party to supply the innovative programming, and, as such, is not properly described as being directed to an improvement in computer systems.

In response, the majority identified three flaws with Justice Hughes’s posit.  

First, the majority noted that the ‘740 patent includes an appendix having 263 frames of code, and noted that the assumption that the code does not teach a person of ordinary skill in the art was improper at the stage of reviewing a Rule 12(b)(6) motion, where all factual inferences must be drawn in favor of the non-moving party.

Second, the majority noted that the question of whether a patent specification teaches a person of ordinary skill in the art how to implement the claimed invention presents an enablement issue under 35 U.S.C. § 112 rather than an eligibility issue under § 101.  Further, the majority noted that the implementation details regarding how to configure a programmable operational characteristic may very well fall within the routine knowledge of persons having ordinary skill in the art and, as such, may have been permissibly omitted.  

Third, the majority noted that Justice Hughes’s assumption that the innovative effort in the ‘740 patent lies in the programming required for a computer to configure a programmable operational characteristic of a cache memory was misplaced.  In support, the majority noted that the assumption was inconsistent with the ‘740 patent’s specification and claims, which expressly state that the improved memory system is achieved by configuring a programmable operational characteristics of a cache memory based on the type of processor connected to the memory system.

In closing, the majority refrained from proceeding to step two of the Alice test because of the finding that the claims of the ‘740 patent are not directed to an abstract idea.   

Going forward, the decision provides some instruction regarding potential patent drafting and prosecution strategies regarding software-based inventions and § 101 issues.  For example, the decision highlights the importance of directing the specification and claims to improvements in computer systems, and the importance of mentioning technical benefits provided by the invention wherever feasible.  Moreover, the case highlights a distinction that can be drawn between enablement and eligibility.

Download Practice Insights in the Wake of Visual Memory LLC v. NVIDIA Corp.

 

Is It Really That Obvious? A Tale of Two Decisions

By William Gvoth & Paul Gurzo

April 9, 2017- On January 3, 2017 the Court of Appeals for the Federal Circuit (the court) handed down two decisions relating to obviousness under § 103 – In re: Marcel Van Os, Freddy Allen Anzures, Scott Forstall, Greg Christie, Imran Chaudhri, No. 2015-1975 (Fed. Cir. 2017) (Van Os) and In re: Ethicon, Inc., No. 2015-1696 (Fed. Cir. 2017) (Ethicon).  This article will tell the tale of these two decisions as well as highlight some of the questions that these decisions raise.

READ MORE >

 

 

Analysis of December 2016 USPTO Subject Matter Eligibility Examples

By Kris Rhu & Paul Gurzo

March 20, 2017- On December 15, 2016, the USPTO published three subject matter eligibility examples focusing on business method claims, which can be found here.  The purpose of these examples is to give guidance on how claims should be analyzed using the 2014 Interim Guidance on Subject Matter Eligibility, recent Supreme Court and Federal Circuit decisions, and recent Memorandums published by the USPTO.  These examples seem to indicate that the power of §101 to restrict patentability has been whittled down since Alice and that the USPTO would like to reduce the number of §101 rejections for technological claims in light of court decisions post-Alice.  Below, we describe each example provided by the USPTO, explain the USPTO guidance for each example, and provide practical practice tips that practitioners can use to help reduce or overcome §101 rejections.

READ MORE >

Top Patent Firms for 2016

By Paul Harrity & Anna Yee (Originally published by IP Watchdog)

We compiled a list of the top patent firms that are ranked based on the total number of U.S. utility patents that issued in 2016 where the patent firms were listed on the front of the utility patents. We have included only patent firms that have obtained at least 50 utility patents. We made an attempt to correct for typographical errors. We did not eliminate company legal departments from the list.

For the list from last year see: Top Patent Firms for 2015.

READ MORE >

 

Alice on Dulany Street: How the PTAB Handles 101 in Ex Parte Appeals

By Eli Mazour & James Bennin

February 15, 2017- “The outlook has become only more grim for appellants who are hoping that the PTAB will overturn a § 101 rejection.”

Alice in WonderlandPreviously, we analyzed ex parte appeal decisions by the Patent Trial and Appeal Board (PTAB) from the year following the Alice v. CLS Bank decision. At the time, we concluded that the PTAB is unlikely to reverse § 101 rejections based on Alice. We decided to revisit this conclusion based on ex parte appeal decisions from December 2016.

READ MORE >

Paul Gurzo Conducts Webinar: “How to Develop Cost Effective & Winning Prosecution Strategies”

May 13, 2016 – Paul Gurzo, Harrity & Harrity Partner, was part of a panel of speakers that discussed how to develop cost effective and winning preparation and prosecution strategies.

Paul frequently speaks on different areas of patent practice, with a focus on strategically preparing and prosecuting applications, and ways companies can maximize the value of their portfolios.

For over 10 years, The Knowledge Group has produced thousands of best in class educational webcasts for a variety of industries and professions including legal, tax, accounting, finance, human resources, risk/compliance, and many others.

Click HERE to order recording of the webinar.