12:01 Tuesday

Care to Wager?

I am currently attending the AIPLA Mid-Winter Institute in Las Vegas, in honor of which I present the following graph:

I'm going to see if the sports book here at Caesar's will list a prop bet of Gambling Patents vs. Golf Patents to issue in 2012. Based on early results -- Gambling is leading, 52-32 after four weeks -- this could be an interesting race.

I hear they are also setting an over-under for the number of posts to 12:01 Tuesday this year. Hmm...

Latest Tool to Fight BPAI Backlog: Laziness?

Today's decision in Ex Parte Schmieding (assignee: Naples, Fla.-based Arthrex, Inc.) may set a record for shortest BPAI decision on the merits. Here's the decision in its entirety:

DECISION ON APPEAL This appeal under 35 U.S.C. § 134 involves claims 1 and 6-14. Claims 14 and 16-20 were “withdrawn from consideration but not canceled” (App. Br. 2; Reply Br. 2). We have jurisdiction under 35 U.S.C. § 6(b). The Examiner rejected claims 1 and 6-13 under 35 U.S.C. § 103(a) as being unpatentable over the combination of Cerundolo and Johnson. Upon consideration of the evidence on this record and each of Appellant’s contentions, we find that the preponderance of evidence on this record falls in favor of Appellant for the reasons set forth in Appellant’s Brief and Reply Brief. Accordingly, we reverse the rejection of record. REVERSED

That's it. Even the Federal Circuit, through its powerful "Rule 36", can only use it to affirm decisions, not to reverse them, as the Board has done here.

If anyone is aware of similar (or even shorter) BPAI decisions on the merits, please share.

IBM and the Art of Arbitrary Application of Abstractness

Quiz: Which of the two following IBM claims do you think is more “abstract”? Which one do you think the BPAI sua sponte rejected under Section 101?

A. A computer-implemented method of responding to a problem condition, comprising: automatically detecting availability of a first candidate to respond to a problem condition; responsive to the detecting: automatically assigning responsibility for the problem condition to the first candidate; and receiving a confirmation from the first candidate indicating acceptance of responsibility for the problem condition.

B. A method for integrating file system events into a database management system (DBMS), comprising: designating a file of interest; detecting a file state change event associated with the file of interest; updating a file events table of a database upon a detection of the file state change event; generating a database trigger upon a change in the file events table; and updating the database with data from the file of interest upon receipt of the database trigger.

Commentary: On the surface, claim (A)’s “computer-implemented” preamble pays some lip-service to concreteness, but otherwise includes only apparently abstract concepts of “candidates,” “problems” and “responsibilities.” Meanwhile, claim (B) includes a somewhat 'particular' “DBMS,” a “database” and “file events.” Easy, right?

But as you might expect with non-precedential decisions (as all but a handful of BPAI cases are), outcomes can be very panel-specific and leave you scratching your head. Here, the Board said nothing regarding the patentability of claim (A)'s subject matter, while reversing a 102 rejection. Ex parte Herbeck.

Only two weeks earlier, in Ex parte Vishnubholta, a different three-member panel affirmed a 102 rejection for claim (B), but added a new rejection under 101. In particularly strong language, the Board found

"[T]he claim fails to recite a machine or transformation of an article of manufacture…Rather, [the claim elements and limitations] are merely abstract ideas that comport with the teachings of Bilski."

Adding insult to injury, the Board went even further, finding that

"[T]here is not even a machine or transformation recited in independent claim 1 that would have qualified as 'insignificant extra-solution activity.'"

In the NFL, this behavior might warrant a 15-yard penalty for taunting the sacked quarterback.

Perhaps the Board was trying to demonstrate the breadth of 101 rejections: in addition to the Bilski rejection for abstractness, the panel also rejected a Beauregard claim under Nuijten for including "signal waves", and affirmed the rejection of a system claim as "software per se" under Warmerdam. Three claim types; three demises under 101.

While another precedential BPAI decision on abstractness could be immensely helpful in the wake of Bilski, if that decision is anything like Vishnubholta, it could signal a tough road for many software patents.

Bull in Bilski's China Shop: B of A's Financial Instrument

In the previous blog post, we examined a claim to a "financial instrument" by Excel Ventures that appeared to slip through to issuance.

With incredible timing, the Board of Patent Appeals and Interferences last week looked at a set of claims with an eerily similar feel:

Ex Parte Birle Application 10/064,745 Assignee: Bank of America [Merrill Lynch] 10. A financial instrument issued by a stock company and held by a holder, shares of stock of the company trading at a price, the instrument having a market price, the instrument comprising: a provision obligating the company to repay the principal according to a predetermined term; a provision making the instrument convertible into a predetermined number of shares of stock of the company at a predetermined conversion price; a provision obligating the company to make a payment to the holder with respect to passage of a time interval in the event the market price of the instrument is in a predetermined relationship to an accreted value thereof, the accreted value defined as the issue price of the instrument plus an economic accrual of a portion of a difference between the issue price and the principal amount at maturity.

Deja vu? Can one really make a distinction between this claim and Excel's with respect to the patentability of its subject matter?

Merrill's appeal brief, filed in 2007, argued by analogy to Beauregard claims:

For many years, Examiners routinely rejected claims direct to computer-readable media containing novel and unobvious content, but these refusals stopped after In re Lowry. Since that time, Examiners have been directed not to reject claims to such computer-readable media, as discussed for example at MPEP section [2106.01]: "When functional descriptive material is recorded on some computer-readable medium, it becomes structurally and functionally interrelated to the medium and will be statutory in most cases since use of technology permits the function of the descriptive material to be realized." By analogy, when functional descriptive material, such as the material set forth in the present rejected claims, is recorded on a "financial instrument" or an "offering document," it likewise "becomes structurally and functionally interrelated to the medium and will be statutory in most cases." Use of the financial instruments or offering documents "permits the function of the descriptive material to be realized."

The BPAI, armed with the Supreme Court's Bilski opinion, was unpersuaded:

We agree with the Appellants that the recitation of a “financial document” and an “offering document” does not automatically cause the claimed invention to be nonstatutory. However, with the exception of the recitation in the preamble of the claims of a “financial instrument” or “offering document,” all the elements of the claims relate to a mental concept or an abstract idea of how to make money. In this regard, the claims relate to an idea related to a financial arrangement between a stock company and a holder of shares of the stock. The claims recite various ways that a holder of shares of stock can make money by, for instance, receiving principal paid according to a predetermined term, receiving a share of stock of a company and receiving money in accordance with an accredited value. In this way, the claims recite a way of converting money paid to a company for value in terms of shares of stock, or accredited value. It is merely an abstract idea of how to make money. Moreover, the claims cover any known and unknown use of the concept. The steps could be performed by any machine, existing or futuredevised. Furthermore, the processes as claimed could be accomplished by human activity alone, including through mental processes. In the words of Gottschalk v. Benson, 409 U.S. 63, 72 (1972), the claimed processes “would wholly pre-empt the [payment to a holder with respect to passage of a time interval] and in practical effect would be a patent on the [concept] itself.” The recitation in the preamble of a “financial document” or an “offering document” does not convert the otherwise nonstatutory subject matter to statutory subject matter. First, as the recitations are in the preamble of the claims and do not appear in the body of the claim, the recitation of a “financial instrument” or an “offering document” is introductory language that does not breath life and meaning into the claims. Therefore, this introductory language does not limit the scope of the claims. In re Pearson, 494 F.2d 1399, 1403 (CCPA 1974); Gerber Garment Tech., Inc. v. Lectra Sys., Inc., 916 F.2d 683, 688 (Fed. Cir. 1990) quoting Perkin- Elmer Corp. v. Computervision Corp., 732 F.2d 888, 896 (Fed. Cir. 1984), cert. denied, 469 U.S. 857 (1984). Second, the recitation of a “financial instrument” and an “offering document” in the preamble fails to make the claims statutory subject matter because the prohibition against patenting abstract ideas “‘cannot be circumvented by attempting to limit the use of the formula to a particular technological environment’ or adding ‘insignificant postsolution activity.’” Bilski v. Kappos, 130 S. Ct. at 3230 (citing Diamond v. Diehr, 450 U.S. 175, 191-92 (1981)). Thus, limiting the implementation of what would otherwise be mental steps or abstract ideas to a “financial instrument” or an “offering document” is insufficient to place the claims into the realm of patentable subject matter under 35 U.S.C. § 101. We, therefore, affirm the Examiner’s rejection.

The story is not over, however; because the Board's rationale differed from the Examiner's, it denoted this as a new ground of rejection, thus reopening prosecution.

It will be interesting to see how B of A amends and argues to navigate through the china shop.

Poster Child

It's been a long time since we've seen one like this.

U.S. Patent No. 7,818,225 Financial instrument and related business method Assignee: Excel Ventures LLC, Schenectady, NY Issued: October 19, 2010 1. A financial instrument of an entity, said financial instrument comprising: a conventional investment instrument; a penalty feature added to the conventional investment instrument; and a dividend feature added to the conventional investment instrument, said penalty feature characterized by a penalty assessed against a holder of at least one share of the financial instrument who sells the at least one share on a date of sale that precedes an extinguish date associated with the financial instrument, said dividend feature characterized by a dividend adapted to be distributed, on a date subsequent to the date of sale, to all Holders of Record of the financial instrument on the date of sale, said dividend being derived from said penalty, said financial instrument adapted to be acquired by a plurality of investors.

Commentary: Not sure there's much to say, other than that this claim was rejected under Bilski in November 2009. Here's the argument that won over the Examiner:

"Applicants respectfully contend that the machine-or-transformation test set forth by the Federal Circuit in In re Bilski applies only to method claims and thus not to claims 1-20 which are not drawn to a method."

The Examiner then allowed the claim on June 14, 2010 -- two weeks before the Supreme Court reaffirmed "the unpatentability of abstract ideas."

Perhaps this is the financial "instrument" that is to be used to "physically transform" the "lumpy cash flows" in U.S. Patent No. 7,451,104.

Sign of the Times: Topps' Method of Trading Baseball Cards

The small pharmacy a mile from my childhood house was a frequent summer bicycle destination for me growing up. That's where my friends and I would go to buy packs and packs of Topps' baseball cards. I still remember opening a wrapper in 1978 to find a Pete Rose--while he was in the middle of his 44 game hitting streak. I hear that card in mint condition might fetch 20 dollars. (Mine--now bent and missing corners--maybe gets a buck.)

So it was nice to see a few weeks ago that Topps obtained its first utility patent in almost seven years (only its sixth utility patent in 30 years). Moreover, this is Topps' first patent that has nothing to do with chewing gum or candy -- it's...get this...a business method patent:

U.S. Patent No. 7,797,194 Method and apparatus for offering for sale collectibles on primary and secondary markets Assignee: The Topps Company, Inc. Issued: September 14, 2010 1. A method of facilitating an issuer of collectibles to manage an offering of collectibles for sale, each of the collectibles having a predetermined condition, said method comprising the steps of: a) initially offering for sale the collectibles to potential purchasers for a period of time set by the issuer; b) receiving orders from the ordering potential purchasers; c) allocating the offered collectibles among selected of the ordering potential purchasers; d) facilitating steps a), b) and c) by a programmed computer; and e) maintaining the condition of the collectibles during steps a), b) and c), whereby the allocated collectibles are of the predetermined condition and the issuer may guarantee the condition of the allocated collectibles, wherein step b) offers an initial offering of collectibles, and there is further included the step of offering for sale selected of the allocated collectibles on a secondary market at the direction of the purchasers of the allocated collectibles.

Commentary: Great. I suppose this means that my kids may not be trading actual baseball cards: instead, they'll be trading futures in baseball cards. Then again, if "personal seat licenses" are now the norm for ticket holders, then why not introduce children to similar concepts early on, right? At least it gets them to think of these cards as the investments they really are, rather than just things to put in your bike spokes so they will make cool ratchety noises. (Sorry, Pete.)

Of course, there's one immediate shortcoming, in my opinion. The patent talks about an "IPO" for a card ("Initial Player Offering") and buying multiple cards for players expected to increase in value (e.g., you may want to buy many Derek Jeter cards "if you believe that Derek Jeter will become the best shortstop of all time," says the patent). That's a great tool to teach kids about buying and holding stocks, but what about selling short? There's apparently nothing in Topp's system that allows me to sell you the Stephen Strasburg card I don't have.

No formal drawings. Even the figures look like they were drawn by 11-year olds.

Bilski. Does this even need mentioning? Actually, the Examiner did reject several claims for failing machine-or-transformation, but other claims somehow survived. Given the recent PTO's recent pronouncements on interpreting KSR, however, I'd think that step d) here might not overcome an obviousness rejection.

Seven Appeal Briefs, No BPAI Decision. The claims in Topps' patent application were given their first final rejection in 2001. But as hard as Topps tried to appeal those rejections, it just couldn't make it up to the Board. The first two attempts resulted in the examiner reopening prosecution with new grounds of rejection. Then there were two defective briefs. Then a substitute brief kicked by the Board because it was not considered by the Examiner. Then another defective brief. Then another brief that reopened prosecution with a new rejection -- which was overcome, resulting in allowance. I suspect the Examiner was simply worn out by this point. Or Topps' counsel takes lessons from the Swamp King.

Filed five months too early? Topps' application was filed in January 2000. Unfortunately, Patent Term Adjustment only is allowed for applications filed after May 29, 2000. With over ten years from application to issuance, that would have been over seven years of "B" delay, alone (assuming there was no applicant delay--you can check that for yourself). But here is is the real travesty of all those failed appeal attempts: under the older Patent Term Extension--which applied to this application--had Topps received a favorable appeal decision from the BPAI, then it would have received extra term dating back to the Notice of Appeal. But without any decision on the merits by the Board (even though the Examiner reconsidered his rejections several times), the term is a flat 20 years from filing.

Adding even more insult to injury, Topps had successfully petitioned to make the application special, resulting in an accelerated examination. Despite, these efforts, in hindsight Topps would have been better off dropping this app in favor of a continuation after the first final rejection in October 2001.

Derivatives. Anyone care to create an options exchange for Topps?

UPDATE 10/20/2010: I'm informed that Topps actually has a commercial service based on the teachings of this patent, called etopps.

Last Day of Enforceability for Patent 4,xxx,xxx

Today marks the end of the four millions.

U.S. Patent No. 4,997,100 Unitary biological specimen processing apparatus Inventor: Peter P. Dudek Issued: March 5, 1991 Filed: August 31, 1990 Abstract: A Unitary biological processing apparatus for processing specimens therein is described wherein a perforated receptacle member with two arc shaped abutment means and a third hook shaped abutment means is attached through a frangible hinge portion to a perforated lid member with two arc shaped detent means at the two edges of the lid member which are perpendicular to the lid member edge extending along the hinge portion, and a third detent means engageable with the hook shaped abutment means. When the lid member is swung about the hinge the arc shaped engagement means become engaged even before the lid member mates against the receptacle member and the two arc shaped engagement means provide with the third engagement means a three-point lock of the lid member onto the receptacle member

You can check for yourself, or you can take my word for it: any other patent under 5,000,000 is either: a) 20 years past its earliest priority date; or b) expired for failure to pay maintenance fees. (And every patent under 5,000,000 is more than seventeen years past issuance.)

Challenge: When will the last of the 5,000,000s expire? I suspect that PTE (which was not applicable to the 4,000,000s) may cause major headaches in determining the answer.

Old Becomes New in 2010

Are we starting to see some evidence of President Obama's promised Transparency?

Consider the following odd statistic: 

• Number of patents to issue in 2010 (so far) with prosecution histories of more than 20 years: 10
• Number of patents to issue in 2009 with prosecution histories of more than 20 years: 0
• ,,,in 2008: 4
  
• ,,,in 2007: 3
  

The 2010 patents are shown in the chart below.

 

As you might expect, most of these patents (the longest seven on the list) were subject to secrecy orders in the name of national security that delayed their prosecution and issuance by many years. (Two of the other three patents were involved in long interference battles, and the last one on the list was simply unintentionally abandoned for several years.)

Why the vast difference between 2010 and 2009 (and the previous two years)? One theory is that, under the Obama administration and its promise "to usher in a new era of open government," the secrecy orders on older patent applications were reviewed with a new eye toward transparency, resulting in lifting more confidentiality restrictions than had previously been done. The timing would fit: if the secrecy orders were lifted during Obama's first year in office -- 2009 -- then after a few months of resumed prosecution and preparation for publication, the patents would issue in 2010. Makes sense.

But like many nice theories, it's unfortunately not supported by the facts. In actuality, only one of these patents, 7,673,565, had its secrecy order rescinded in 2009. In fact, the oldest patent on the list, 7,696,460, was declassified in 2000 under Clinton. The others came out of hiding between 2005-2008, during the "secretive" George W. Bush presidency.

For now, we'll just chalk this up to coincidence and randomness. But if someone out there has a better theory, please share.

Expiration Challenge II

Today Symbol Technologies -- the company that revived the doctrine of prosecution laches to bring down Lemelson's patents -- received U.S. Patent No. 7,738,865.  On the surface, it appears that this patent, like a few of the Army's described in earlier posts, expired long before it issued.  But did it?

You tell me.  When does/did this patent expire?

Hint #1: you will probably have to argue your position using case law.

Winner gets the bottle of Costco ibuprofen sitting in my desk drawer, expired 1/06. (And to you pharma folks -- is there really a harm in my still taking them?)

A more complete discussion will follow.

Stanley

Though I'm a lifelong fan of the Detroit Red Wings, I'm sure I will get some chills looking down and seeing the Stanley Cup parade past my office building in about an hour. In its honor, here are two design patents inspired by the Grail. Unsurprisingly, both relate to drinking.  Bottoms up!

D461,367 "Drinking Mug"

 
D434,313 "Stanley Cup Shaped Can"