The most significant Federal Circuit decision in March was Thales Visionix, Inc. v. United States, another case finding eligible subject matter.  What distinguishes this case—and demonstrates the inherently subjective I-know-it-when-I-see-it nature of the Alice test—is the extraordinary breadth of the claims.  Consider claim 22, a single-step method claim:

  1. A method comprising determining an orientation of an object relative to a moving reference frame based on signals from two inertial sensors mounted respectively on the object and on the moving reference frame.

The court held that this claim was patent eligible, because it was not directed to an abstract idea in Step 1 of the Alice test:

We hold that the ’159 patent claims at issue in this appeal are not directed to an abstract idea. The claims specify a particular configuration of inertial sensors and a particular method of using the raw data from the sensors in order to more accurately calculate the position and orientation of an object on a moving platform.

Continue Reading Heads Up: The Federal Circuit Sees Patent Eligibility in Knowing Which Way to Look

As many of you know, the Federal Circuit’s decision in Trading Technologies was the first time a graphical user interface had been found patent eligible by the Federal Circuit.   The defendant CQG moved for both panel rehearing and enbanc rehearing.

My client SHzoom filed a request to make the Trading Technologies decision precedential.  CQG attempted to leverage that motion as a further reason for the case to be reheard, arguing in their respose that “SHzoom’s Motion requesting that the panel’s decision in this case be made precedential should be denied. Its arguments further illustrate why CQG’s Petition for rehearing en banc should be granted.”

The Federal Circuit did not bite and today denied CQG’s petitions for rehearing.  We’ll likely see their decision on SHzoom’s motion shortly.

With the close of the first quarter of 2017, there have been some interesting patterns developing in AliceStorm.  Let’s start with the big picture: There was a flurry of activity in March, with a record number of Section 101 decisions.  The Federal Circuit issued 11 decisions alone (its highest monthly output), and the district courts contributed another 24 (third highest month).  However, the overall percentages of invalidity outcomes are stable as compared to last month, which is really more a reflection of the law of large numbers: there have been so many Section 101 decisions that the total percentages are not going to change significantly month to month. Continue Reading AliceStorm Update for Q1 2017

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.

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Introduction

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

As many of my readers noticed, I didn’t publish any of my own blogs in January and February.  As it turned out, I suffered from a peculiar form of seasonal affective disorder (SAD), what I would call SMIAD: Subject Matter Ineligible Affective Disorder.  The unrelenting rains here in San Francisco, a similar torrent of Section 101 rejections from the USPTO, and an uptick in the rate of court decisions invalidating patents, converged to put me in a dour and de-inspired mood.  With the return of the sun and some interesting decisions from the Federal Circuit, it’s time to get back to tracking AliceStorm. First, an update on the overall AliceStorm numbers, through the end of February, 2017: Compared to the December numbers, the changes are mixed.  The Federal Circuit ineligibility rate increased 1.9% to 90.9%, while the district court rate declined 1.2% to 61.8%.  There’s been a 1% drop in the overall percentage of patents invalidated as well, down to 59.3%. The success rate on motions on the pleadings (including both motions to dismiss and motions for judgment on the pleadings) is down 0.6% to 62.3%. Continue Reading AliceStorm Update February 2017

The U.S. Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank (“Alice”)[i] has had a dramatic impact on the allowability of computer implemented inventions, especially in the finance arts (e.g. insurance, banking, etc.).  This series of articles explores the dynamics of that impact in different computer implemented arts as a useful guide to help patent practitioners navigate the new realities of post-Alice prosecution. In Technology Center 3600, art units 3691-3696 within Work Group 3690 examine applications in finance, banking and insurance (“Finance Art Units”).  These art units have been the most heavily impacted by Alice.

Fig. 1

Figure 1 shows the total number of allowances per month, abandons per month and appeals per month for patent applications examined in Work Group 3690, from January 2014 to March 2016.  The data is from the USPTO’s public PAIR[ii] system.  PatentAdvisor™[iii] was used to collect and process the data. There are currently about 80 examiners in this Work Group.  The Work Group produces about 8400 office actions on the merits per year (i.e. nonfinal rejections, final rejections and allowances).  Prior to Alice, about 2100 of the actions per year were allowances (25% of the total actions).  Post Alice, only 220 of the actions per year have been allowances (2.6% of the total actions). Continue Reading Surviving Alice in the Finance Arts

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.

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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