On April 12th, the Federal Circuit, in a per curiam order, denied SHzoom’s motion to make the Trading Technologies opinion precedential.   The order of course gave no reasons for the decision.   Even so, the underlying decision is still a good one for patentees and applicants. While not binding on the USPTO, it can nonetheless be argued as persuasive authority to examiners where the facts in the application “uniquely match” those in the case. Prosecutors should consider arguing this case to examiners where they have specifically claimed graphical elements that provide specific functionality. The case is noteworthy because it is the first true “business method” patent that the Federal Circuit has upheld.  The claims of the patents specifically recited steps for placing trade orders in electronic exchanges. Claim 1 of Trading Technologies’ US 6,766,304 is shown here as example:
Continue Reading Federal Circuit Denies SHzoom’s Bid to Make Trading Technologies Decision Precedential, But the Case is Still Good Law

On January 18, 2017 the Federal Circuit issued an opinion in Trading Technologies Int’l., Inc. v. CQG, Inc., its first decision finding a user interface to be patent eligible subject matter. The court designated the opinion as non-precedential.  On Monday SHzoom LLC filed a motion under Federal Circuit Rule 32.1(e), which allows any person to request that the court reissue a decision as precedential. The text of the motion is set forth below.  Fenwick represented SHzoom.



Third party SHzoom LLC (“SHzoom”) hereby moves this court to reissue its January 18, 2017 decision (Dkt. No. 73), in Trading Technologies Int’l., Inc. v. CQG, Inc., No. 2017 U.S. App. LEXIS 834 (Fed. Cir. Jan. 18, 2017) (“Trading Technologies”) as precedential, pursuant to Federal Circuit Rule 32.1(e). As the appellant CQG, Inc. (“CQG”) has filed a petition for Rehearing En Banc, Shzoom’s request is filed to meet the stated deadline of Rule 32.1(e), and as such need only be considered if CQG’s request is denied.  The parties to the case have been notified of this request.

Continue Reading Shzoom Requests the Federal Circuit Reissue Trading Technologies as Precedential Opinion

Like the odd aunt whose holiday gifts can range from the wonderful to the recyclable, in 2016 Alice brought both good and bad tidings.  Let’s start with the nice ones. The numbers here are through December 22, 2016.  The big picture is that the overall rate of district court ineligibility decisions* has declined each year since Alice, while the total number of decisions has increased each year.  This may be an indication of several factors.  First, plaintiffs are being more careful in selecting which patents to assert.  Thus, clear losers do not get picked for litigation. On the other hand, defendants continue to push the envelope on what they can challenge under Section 101, and in doing so, have overreached. As a result, the overall invalidity rate has fallen.
Continue Reading Alice Brings a Mix of Gifts For 2016 Holidays

Editor’s Introduction:  The following post is by Wayne Sobon, and is based on the remarks he made at the USPTO’s Patent Subject Matter Eligibility Roundtable on December 5, 2016.  Mr. Sobon has over thirty years of experience as a patent attorney. He has served as chief IP counsel in several major corporations, as well as being an entrepreneur.  He is a past president of AIPLA and recently served on the Patent Public Advisory Committee of the USPTO.


I’d like to go back to some first principles and history.

Article 1, Section 8 of the Constitution neatly divided the promotion of, on the one hand:

  • Science, the fields of knowledge and ideas, by securing exclusive rights to Authors of their Writings. Things like books and maps and charts.
  • And the Useful Arts, where science and ideas are transformed into tools and actions in the world, by securing exclusive rights to Inventors of their Discoveries.

Basic ideas and science would remain free for all.

One of the first Congressional acts was the Patent Act of 1790, which granted patents to any persons that “have invented or discovered any useful Art, Manufacture, Engine, Machine or Device, or any improvement therein, not before known or used”, provided that the invention or discovery was deemed “sufficiently useful and important”.

Continue Reading Exploring the Legal Contours of Patent Subject Matter Eligibility

I am a solo entrepreneur.  After twenty plus years in industry, I decided to take the risk and start my own business using my own capital. In the parlance of the law I am considered, almost affectionately, a micro-entity.

I knew I needed intellectual property protection and one of the first things I did was file for a trademark application.  With my micro-entity status, I successfully prosecuted my own trademark application, without objection from the examiner.  I also wanted to protect my underlying business process, and I assumed that my experience going through the patent prosecution process would go just as smoothly. I have come to learn otherwise.

As a micro-entity, getting my invention patented has proven to be a long and difficult road. With no political connections and very limited resources, it is painfully obvious that this system of multiple office actions, RCEs, and then perhaps appeals to PTAB and the Federal Circuit, was not designed for solo entrepreneurs.  The complexity of the system put me at a particular disadvantage to the larger corporations who are clearly benefiting from my, now published, patent application.

Continue Reading A Long Road Ahead: A Solo Entrepreneur’s Perspective on the USPTO’s Roundtable I – Subject Matter Eligibility Guidelines

On December 5, 2016 the USPTO will hold its second Patent Subject Matter Eligibility Roundtable to discuss issues in patent eligibility.  The USPTO published a list of eighteen questions in anticipation of the event, dealing with various issues in eligibility theory, legislative changes and so forth, and requesting comments in response.  Here are the answers I will be submitting to the Office.

Impact of Judicial Interpretation of Section 101

1. How has the Supreme Court’s interpretation of 35 U.S.C. 101 in the past several years affected the enforcement of patents and the development of subject-matter- eligibility law?

The Supreme Court’s current definition of a law of nature is scientifically incorrect.  The analysis of this issue is quite complex, but I will attempt to summarize the issue.  The Court’s definition in the Mayo case came down to: “the relation itself exists in principle apart from any human action. The relation is a consequence of the ways in which thiopurine compounds are metabolized by the body—entirely natural processes. And so a patent that simply describes that relation sets forth a natural law.”

Continue Reading USPTO’s Patent Subject Matter Eligibility Roundtable on Dec. 5, 2016

The White House recently announced the Cancer Moonshot Task Force, an effort to “focus on making the most of Federal investments, targeted incentives, private sector efforts from industry and philanthropy, patient engagement initiatives, and other mechanisms to support cancer research and enable progress in treatment and care.”  Yesterday, in support of this project, the White House and the USPTO launched “Patents 4 Patients,” an initiative to “free fast-track review for cancer treatment-related patents.”  More specifically, the objective of the program “is to complete the examination of an application containing a claim(s) to a method of treating a cancer using immunotherapy within twelve months of special status being granted.” 

In theory this sounds like a great idea. In practice, there’s a significant problem:  Section 101 and the scientifically incoherent definition of a ‘law of nature’ imposed by the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc.  In Mayo the Court essentially ruled that any natural relationship or correlation that “exists in principle apart from any human action” sets forth a law of nature, and thus is not patent eligible without the addition of "significantly more."  

Continue Reading Will the USPTO’s “Patents 4 Patients” Program Even Make It Off the “Cancer Moonshot” Launch Pad?

See Part 1 AliceStorm at the USPTO While AliceStorm’s effect is most visible in the courts, because of their public nature, the real impact is largely unseen: it is the widespread rejection of patent applications by the USPTO.  The number of patent applications that have been rejected specifically based on Alice is vastly larger than the number of invalidated patents: well over 36,000 applications have been rejected based on Alice, and over 5,000 such applications having been abandoned.1 With the assistance of Patent Advisor, I have collected a large database of USPTO prosecution events (office actions and notices of allowances) issued over the past several years.  Table 2 is summary of the number of prosecution events analyzed, with respect to USPTO technology centers, and various time periods:2 Alice Table 2
Continue Reading Two Years After Alice: A Survey of the Impact of a “Minor Case” (Part 2)

Go to: Part 1, Part 2, Part 3, Part 4, Part 5

(This series of posts is based on an upcoming paper for the AIPLA Spring 2016 meeting.)


Even if UDC did not support the Solicitor General’s argument that “the functions themselves are the same procedures which a human being would perform in working the same computation,” there remains whether this theory nonetheless holds merit on its own.  This is an important question because this argument underlies the “pencil and paper” test of patent eligibility that is frequently invoked by the courts.

The functional equivalence argument—that the mind/brain operates in a similar way as a digital computer—is now a familiar part of the “mind as computer” metaphor.  The “mind as computer” metaphor is presently formalized as the computational theory of mind or computationalism,1 the view “that intelligent behavior is causally explained by computations performed by the agent’s cognitive system (or brain).”2 Simply stated, as applied to humans, it holds that cognition in the brain is provided by computation.  This view is now the dominant view in cognitive science and related fields. 

Continue Reading The Mind as Computer Metaphor: Benson and the Mistaken Application of Mental Steps to Software (Part 3)

Go to: Part 1, Part 2, Part 3, Part 4, Part 5

(This series of posts is based on an upcoming paper for the AIPLA Spring 2016 meeting.)


The fictional form of the mental steps doctrine arose in Benson, where the Court stated:

A digital computer, as distinguished from an analog computer, is that which operates on data expressed in digits, solving a problem by doing arithmetic as a person would do it by head and hand.1


the conversion of BCD numerals to pure binary numerals can be done mentally… can also be performed without a computer.2 

Where did the Supreme Court come up with this principle that a digital computer solves problems the same way a person does?  The Court cited Ronald Benrey, Understanding Digital Computers (1964) as support.  First, it seems odd that a book titled Understanding Digital Computers (“UDC”), which would likely be directed to a technical discussion of the operation of digital computers, would make such an authoritative-sounding statement at a time when science had little real insight into how the human brain actually performs calculations.  Second, the citation to UDC is illuminating but not sufficient, since clearly the Supreme Court did not do its own research to source this statement.

Continue Reading The Mind as Computer Metaphor: Benson and the Mistaken Application of Mental Steps to Software (Part 2)