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