12:01 Tuesday

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" 

Godot; Guffman; Bilski: USPTO Postpones Business Methods Meeting

Seems like we're not the only ones waiting for a decision. This morning I received the following e-mail from Jeff Smith, a supervisory examiner in the 3600 TC and coordinator of the annual Business Methods Partnership Meeting:

From: "Smith, Jeffrey A. (AU3625)" Date: June 11, 2010 6:37:36 AM CDT Subject: Notification of Postponement of the 2010 Business Methods Partnership Meeting Greetings, You were recently invited to attend this year's annual Business Method's Partnership Meeting to be held on July 15, 2010.  Regretfully, we must postpone this event.  We recognize and appreciate our community's profound interest in Bilski v. Kappos currently before the United States Supreme Court, and inasmuch as we still await a decision in this case, we find it best to postpone this meeting to a future time when more guidance will be in place for this decision. We apologize for any inconvenience the postponement of this meeting may have caused. We will provide notice to you once we determine the best possible date for the rescheduling of this event. Sincerely, Jeff Smith Supervisory Patent Examiner A.U. 3625 Knox, Rm 5D05

On the positive side, if you were planning on making the trip from out-of-town, you are now spared one dose of D.C. humidity this summer.

Posted on June 11, 2010 at 08:43 AM in Bilski | Permalink | Comments (2) | TrackBack (0)

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Seems like we're not the only ones waiting for a decision. This morning I received the following e-mail from Jeff Smith, a supervisory examiner in the 3600 TC and coordinator of the annual Business Methods Partnership Meeting:

From: "Smith, Jeffrey A. (AU3625)" Date: June 11, 2010 6:37:36 AM CDT Subject: Notification of Postponement of the 2010 Business Methods Partnership Meeting Greetings, You were recently invited to attend this year's annual Business Method's Partnership Meeting to be held on July 15, 2010.  Regretfully, we must postpone this event.  We recognize and appreciate our community's profound interest in Bilski v. Kappos currently before the United States Supreme Court, and inasmuch as we still await a decision in this case, we find it best to postpone this meeting to a future time when more guidance will be in place for this decision. We apologize for any inconvenience the postponement of this meeting may have caused. We will provide notice to you once we determine the best possible date for the rescheduling of this event. Sincerely, Jeff Smith Supervisory Patent Examiner A.U. 3625 Knox, Rm 5D05

On the positive side, if you were planning on making the trip from out-of-town, you are now spared one dose of D.C. humidity this summer.

Last week Yahoo! announced it was shuttering its answer to Google's AdSense, which was targeted at allowing smaller players -- blogs -- to make a few bucks through placement of ads. While that may be a front on which it has conceded defeat, judging by at least one of its recently issued patents, however, Yahoo! is keeping active in the bigger world of targeted online advertising. Consider this patent from a few weeks ago:

U.S. Patent No. 7,680,786 Optimization of targeted advertisements based on user profile information Assignee: Yahoo! Inc. Issued: March 16, 2010 1. A method of targeting based on user information, the method comprising:  identifying a set of keywords associated with content information requested by a user over a network;  retrieving advertising information corresponding to said set of keywords;  retrieving user profile information associated with said user, said user profile information comprising a user matrix, said user matrix comprises, for said set of keywords and said corresponding advertising information, click-through-rates associated with said user and a bid price for said advertising information;  filtering said advertising information to select advertisements based on said bid price for said advertising information and said corresponding click-through-rate associated with said user identified in said user matrix for said set of keywords; and  providing said advertising information selected to be displayed for said user in connection with said content information.

In other words, an advertiser pays more to present its online ad to you when it knows you historically have a higher rate of clicking-through to presented online ads. That, of course, can only happen if somebody is keeping track of your click-through rate. While this may not be so different from other forms of targeted advertising based on user profiles, something about it feels closer to the "evil" end of the Google-motto-scale. (The University of Chicago part of me sees this as a kind of double price discrimination: a) the advertiser willing to pay the most gets the slot; and b) the price is further determined based on traits of the specific users. Of course, the users here are the real "product" being sold to the advertisers, so it's not quite the same. But still interesting.)

From the patent prosecution angle, there are two additional things to note. First, there was no Bilski rejection.  Looks to me like the "network" is the only machine-like element explicitly mentioned.

Second, this patent is the first I've seen that went through the First-Action Interview Pilot Program. This program, which expired just last week, was set up for certain art units to allow applicants an opportunity to receive search results and interact with the examiner prior to a first action on the merits.  Here's how that played out for Yahoo!:

• 10/30/06 - Yahoo files application
• 6/4/08 - Yahoo enrolls in pilot program
• 9/10/08 - PTO gives a "Preinterview first office action"
• 10/10/08 - Yahoo proposes amended claims
• 11/18/08 - Yahoo and PTO have interview to discuss proposed amendment - no resolution
• 12/9/08 - PTO issues "First Action Interview Office Action" rejecting claims
• 1/9/09 - Yahoo amends claims
• 4/1/09 - PTO issues Non-Final, "first" action on the merits
• 7/7/09 - Yahoo amends
• 10/28/09 - Allowance

By participating in the pilot program, Yahoo got two extra bites at the apple (by proposing amended claims after the "Preinterview" action, and again amending after the "First Action Interview" action), PLUS the interview. And all before a true "first action on the merits." It also appears that the examiner may have accelerated the examination of this application (though this was not an advertised feature of the program).

The pilot was extended once, to 4/1/2010. But there's been nothing about it being extended again. If anyone has seen statistics relating to the program, please feel free to share.

For searching purposes, the USPTO classifies patent applications according to their general subject matter.  If you're the type to read the Patent Act cover-to-cover, you may already know that there is actually statutory authority for classification in 35 USC Section 8, which authorizes the Director to maintain a classification system "for the purpose of determining with readiness and accuracy the novelty of inventions for which applications for patent are filed."  Currently, there are over 400 classes, and you can find them on the PTO site if you really are curious (or really are bored...) See MPEP 900 et seq. for more information.

One class that is worth watching, and is part of my weekly scan, is class 705, titled, "DATA PROCESSING: FINANCIAL, BUSINESS PRACTICE, MANAGEMENT, OR COST/PRICE DETERMINATION." Class 705 contains most of the so-called "business method" patents.  Over the past couple years, a typical week would see about 45-65 patents issue from Class 705. Today that number jumped to 111.  And, as shown in the chart below, it appears to be the latest point in an upwards trend.

 
The trend is highlighted by focusing on the 60 patent mark. From January through July 2009, only three times did the number of weekly issuances from Class 705 exceed 60.  But from August 2009 through today, there have been only five weeks when the number was below 60.

This data runs counter to the CW that there would be a post-Bilski drop in the allowance of business method patents. (Potentially, anyway...it may be that there was a surge in non-business method applications from 705.)

Theories?  Could it simply be more examiners being hired in the Art Units that deal with 705-type applications?

For a move even Stephen Colbert would admire for its ballsiness, we extend kudos to Hewlett-Packard, who argued the following in its appeal brief of App. No. 09/976,630:

 

No mention of In re Nuijten, which was decided several months earlier. Or maybe HP thinks that it is unconstitutional to apply KSR, too, since there are oodles of obvious claims out there in issued patents...

Today, the Board of Patent Appeals and Interferences responded appropriately in its Ex Parte Haines decision:

Section 101 rejection of claims 21-27   Appellant alleges that the USPTO has issued patents to others that contain “propagated signal claims.” Appellant contends that the § 101 rejection of the instant claims is a violation of Appellant’s rights under the equal protection clause of the Fourteenth Amendment to the U.S. Constitution. App. Br. 14.   However, Appellant has not cited any authority in support of the novel legal argument. The U.S. Patent and Trademark Office is not part of a state (or local) government, but an agency of the U.S. Department of Commerce. Cf. U.S. Const. amend. XIV, § 1 (“No State shall . . . deny to any person within its jurisdiction the equal protection of the laws.”). We are not persuaded that the USPTO has violated Appellant’s rights to equal protection of the laws under the Constitution.[FN1] [FN1]: Absent showing that the agency acted pursuant to some impermissible or arbitrary standard, an argument based on the equal protection component of the Due Process Clause of the Fifth Amendment would also fail. See In re Boulevard Entertainment, Inc., 334 F.3d 1336, 1343 (Fed. Cir. 2003) (TTAB decision that affirmed the refusal to register marks containing the term “jack-off” did not violate equal protection principles, even though the USPTO had previously registered similar marks for other applicants).

Special Offer, Just For You: Yahoo's patent on targeted advertising

Last week Yahoo! announced it was shuttering its answer to Google's AdSense, which was targeted at allowing smaller players -- blogs -- to make a few bucks through placement of ads. While that may be a front on which it has conceded defeat, judging by at least one of its recently issued patents, however, Yahoo! is keeping active in the bigger world of targeted online advertising. Consider this patent from a few weeks ago:

U.S. Patent No. 7,680,786 Optimization of targeted advertisements based on user profile information Assignee: Yahoo! Inc. Issued: March 16, 2010 1. A method of targeting based on user information, the method comprising:  identifying a set of keywords associated with content information requested by a user over a network;  retrieving advertising information corresponding to said set of keywords;  retrieving user profile information associated with said user, said user profile information comprising a user matrix, said user matrix comprises, for said set of keywords and said corresponding advertising information, click-through-rates associated with said user and a bid price for said advertising information;  filtering said advertising information to select advertisements based on said bid price for said advertising information and said corresponding click-through-rate associated with said user identified in said user matrix for said set of keywords; and  providing said advertising information selected to be displayed for said user in connection with said content information.

In other words, an advertiser pays more to present its online ad to you when it knows you historically have a higher rate of clicking-through to presented online ads. That, of course, can only happen if somebody is keeping track of your click-through rate. While this may not be so different from other forms of targeted advertising based on user profiles, something about it feels closer to the "evil" end of the Google-motto-scale. (The University of Chicago part of me sees this as a kind of double price discrimination: a) the advertiser willing to pay the most gets the slot; and b) the price is further determined based on traits of the specific users. Of course, the users here are the real "product" being sold to the advertisers, so it's not quite the same. But still interesting.)

From the patent prosecution angle, there are two additional things to note. First, there was no Bilski rejection.  Looks to me like the "network" is the only machine-like element explicitly mentioned.

Second, this patent is the first I've seen that went through the First-Action Interview Pilot Program. This program, which expired just last week, was set up for certain art units to allow applicants an opportunity to receive search results and interact with the examiner prior to a first action on the merits.  Here's how that played out for Yahoo!:

• 10/30/06 - Yahoo files application
• 6/4/08 - Yahoo enrolls in pilot program
• 9/10/08 - PTO gives a "Preinterview first office action"
• 10/10/08 - Yahoo proposes amended claims
• 11/18/08 - Yahoo and PTO have interview to discuss proposed amendment - no resolution
• 12/9/08 - PTO issues "First Action Interview Office Action" rejecting claims
• 1/9/09 - Yahoo amends claims
• 4/1/09 - PTO issues Non-Final, "first" action on the merits
• 7/7/09 - Yahoo amends
• 10/28/09 - Allowance

By participating in the pilot program, Yahoo got two extra bites at the apple (by proposing amended claims after the "Preinterview" action, and again amending after the "First Action Interview" action), PLUS the interview. And all before a true "first action on the merits." It also appears that the examiner may have accelerated the examination of this application (though this was not an advertised feature of the program).

The pilot was extended once, to 4/1/2010. But there's been nothing about it being extended again. If anyone has seen statistics relating to the program, please feel free to share.

Class 705 Issuances Rising

For searching purposes, the USPTO classifies patent applications according to their general subject matter.  If you're the type to read the Patent Act cover-to-cover, you may already know that there is actually statutory authority for classification in 35 USC Section 8, which authorizes the Director to maintain a classification system "for the purpose of determining with readiness and accuracy the novelty of inventions for which applications for patent are filed."  Currently, there are over 400 classes, and you can find them on the PTO site if you really are curious (or really are bored...) See MPEP 900 et seq. for more information.

One class that is worth watching, and is part of my weekly scan, is class 705, titled, "DATA PROCESSING: FINANCIAL, BUSINESS PRACTICE, MANAGEMENT, OR COST/PRICE DETERMINATION." Class 705 contains most of the so-called "business method" patents.  Over the past couple years, a typical week would see about 45-65 patents issue from Class 705. Today that number jumped to 111.  And, as shown in the chart below, it appears to be the latest point in an upwards trend.

 
The trend is highlighted by focusing on the 60 patent mark. From January through July 2009, only three times did the number of weekly issuances from Class 705 exceed 60.  But from August 2009 through today, there have been only five weeks when the number was below 60.

This data runs counter to the CW that there would be a post-Bilski drop in the allowance of business method patents. (Potentially, anyway...it may be that there was a surge in non-business method applications from 705.)

Theories?  Could it simply be more examiners being hired in the Art Units that deal with 705-type applications?

BPAI to HP: Equal Protection Clause doesn't save claims from 101

For a move even Stephen Colbert would admire for its ballsiness, we extend kudos to Hewlett-Packard, who argued the following in its appeal brief of App. No. 09/976,630:

 

No mention of In re Nuijten, which was decided several months earlier. Or maybe HP thinks that it is unconstitutional to apply KSR, too, since there are oodles of obvious claims out there in issued patents...

Today, the Board of Patent Appeals and Interferences responded appropriately in its Ex Parte Haines decision:

Section 101 rejection of claims 21-27   Appellant alleges that the USPTO has issued patents to others that contain “propagated signal claims.” Appellant contends that the § 101 rejection of the instant claims is a violation of Appellant’s rights under the equal protection clause of the Fourteenth Amendment to the U.S. Constitution. App. Br. 14.   However, Appellant has not cited any authority in support of the novel legal argument. The U.S. Patent and Trademark Office is not part of a state (or local) government, but an agency of the U.S. Department of Commerce. Cf. U.S. Const. amend. XIV, § 1 (“No State shall . . . deny to any person within its jurisdiction the equal protection of the laws.”). We are not persuaded that the USPTO has violated Appellant’s rights to equal protection of the laws under the Constitution.[FN1] [FN1]: Absent showing that the agency acted pursuant to some impermissible or arbitrary standard, an argument based on the equal protection component of the Due Process Clause of the Fifth Amendment would also fail. See In re Boulevard Entertainment, Inc., 334 F.3d 1336, 1343 (Fed. Cir. 2003) (TTAB decision that affirmed the refusal to register marks containing the term “jack-off” did not violate equal protection principles, even though the USPTO had previously registered similar marks for other applicants).