12:01 Tuesday

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But as you might expect with non-precedential decisions (as all but a handful of BPAI cases are), outcomes can be very panel-specific and leave you scratching your head.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.

BPAI Gets Precedential on 101

As I've noted many times over the last year, there has been a severe lack of uniformity coming from the Board of Patent Appeals & Interferences with respect to the application of the machine-or-transformation test.  Sometimes, there were sua sponte rejections.  Sometimes not.  Sometimes a minimal addition of computer sufficed.  Sometimes an apparatus claim directed to the machine itself was rejected.  You get the idea.

Thus, it is noteworthy that the Board recently designated August's Ex Parte Gutta case--where the BPAI panel issued new 101 rejections on system and Beauregard claims, in addition to method claims--as precedential.

This is the first post-Bilski precedential decision squarely addressing 101 (and I believe the first one since Lundgren on patentable subject matter).

Happy Birthday, Beauregard

Twenty years ago tomorrow, U.S. Patent No. 4,864,492 issued to IBM for a “System and method for network configuration.”  On its face, nothing appears out of the ordinary with this patent.  However, lurking within its claims is this:

10. A computer program product having a computer readable medium having computer program logic recorded thereon for establishing a network configuration in accordance with a plurality of protocols of a network architecture, said computer program product comprising: means for incorporating the protocols of the network architecture into a table of rules; means for determining the validity of user input data with said table of rules; and means for feeding back to the user at least one of said rules in said table of rules if said user input is determined to be in valid.

 

And thus, the era of the “computer readable medium” claim was born (albeit with 112/6 "means for" language seldom seen in today's CRM claims).

For those unfamiliar with the “software arts,” here’s the nutshell on CRM claims: rather than simply claiming the method (i.e., the steps performed by a computer program) or a computer system (e.g., the hardware configuration that can be used for performing a computer program), the CRM claim essentially tries to protect the floppy disk (remember those?) or CD, DVD, flash drive, etc. on which the program is stored.  For practical purposes, these claims allow software companies, for example, to go after manufacturers of competing programs on theories of direct infringement—they made and sold infringing disks.  When software claims are limited to systems and methods performed via the end user’s computer, often only indirect infringement theories are available.  More importantly, it may be easier to demonstrate infringement by showing a sale of a disk than by finding an actual instance where method steps were performed.  And of course, that sale would still infringe the CRM claim even if the disk were taken to Mexico and the encoded method was actually performed there -- not so with a straight method claim.

The attorney who prosecuted the ’492 patent, the former Marilyn Smith (now Dawkins), also prosecuted a more famous patent for IBM, U.S. Patent No. 5,710,578 to Beauregard et al.  This patent’s prosecution, of course, went up to the CAFC on the question of the patentability of such CRM claims under Section 101.  In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995).   As a result, CRM claims are often referred to as “Beauregard claims”. (Note, however, that that the Beauregard case was vacated, and its merits were thus never ruled upon by the CAFC.)  Interestingly, Dawkins apparently left IBM and now works for (John) Deere & Co. in Moline, Illinois.  But she co-authored a 1995 IDEA journal article on CRM claims that is loaded with examples and explanations.   Dawkins notes that there was an earlier patent, 4,853,962, that claimed the CRM as a multiple-dependent claim of a method:

10. An information storage device tangibly embodying a program comprising instructions adaptable for execution on a programmed machine, wherein the method of any one of claims 1-9 is performable through the execution of said instructions by the machine.

CRM claims are commonplace today.  How common, you ask?  Consider the following charts showing the history of CRM claim issuances, in absolute numbers as and as a percentage of total patents issued:

The upturn of the hockey stick in the later half of the 90's corresponds directly to the Beauregard case working its way up through the courts, casting more light on the claim format.  But it is almost certain that these charts undercount the actual number: there are many variants of language used in drafting CRM claims, e.g., “machine readable medium”, “computer readable storage medium”, etc.  And now, in light of In re Nuijten, you are seeing more tweaks to the standard language to make clear that the medium is limited to a physical storage device.  It is impossible to capture all these permutations with reasonable effort (using the public PTO database, anyway).

Growing even faster is the rate at which CRM claims are being filed, (note the gap in data sources beginning in 2001, when the PTO started publishing pending applications)::

The last data point shows that 5.5% of all applications filed in 2007 (that subsequently published) contained CRM claims.  That's a hefty percentage, but still far short of what we saw for Jepson claims in the early 1980's.

We can only guess how CRM claims will fare after the Supreme Court’s forthcoming decision on Bilski.  Already we have seen inconsistent results from the BPAI.  In Ex Parte Li, for example, the Board gave tremendous weight to Beauregard claims and found that they were outside Bilski’s purview.  Other panels, however, such as in Ex Parte Cornea-Hasegan, have found that CRM claims may just be exaltations of form over substance, and thus are subject to the Machine or Transformation test.

But until things are sorted out, a CRM claim will likely remain as standard ammunition in the software practitioner’s arsenal.