Kristen Jakobsen OsengaUniversity of Richmond School of Law

Bilski and Beyond:Changing IP for the Information Age

Overview Other Notable Subject Matter Cases Implications for Business Methods, Software

& Tax Inventions

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Other Notable § 101 Cases In re Nuijten (CAFC) In re Ferguson (CAFC, SCT)

In re Nuijten 500 F.3d 1346 (CAFC 2007, cert denied 2008)

Method for introducing watermark into signals with reduced distortion – allowed

Storage medium with method – allowed Signal encoded via claimed method - rejected

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In re Nuijten Examiner, BPAI reject signal claim CAFC (JJ. Gajarsa, Linn, Moore)

Majority: “A transitory, propagating signal . . . is not a ‘process,

machine, manufacture, or composition of matter.’” Process = steps, machine = made of parts,

manufacture = must be tangible

Dissent (J. Linn) Article of manufacture (made by man)

In re Ferguson 558 F.3d 1359 (CAFC 2009) Method of marketing a product, comprising:

Developing a shared marketing force; Using shared marketing force to market plurality of

products from plurality of companies; Obtaining share of total profits from each of

plurality of companies; and Obtaining an exclusive right to market each of

plurality of products.

In re Ferguson A paradigm for marketing software,

comprising: A marketing company that markets software from

a plurality of different . . . software companies, and carries out and pays for operations associated with marketing of software for all of said different . . . software companies…

In re Ferguson Examiner rejected under other patentability

requirements, BPAI raised § 101 CAFC (JJ. Newman, Mayer, Gajarsa)

Method claims fail Bilski’s machine-or-transformation test

Paradigm claims are not drawn to any of the four statutory categories, but rather abstract idea

J. Newman concurs in result, but for § 103 reasons, not subject matter eligibility

In re Ferguson Petition for writ of

certiorari filed June 2, 2009 Are claims that recite

business methods unpatentable per se when they are not tied to a machine and do not preempt any mathematical algorithm?

Is a claim unpatentable under § 101 as being an abstract idea because it does not come within the machine-or-transformation test?

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Implications for business methods, software, & tax

What do we do now???

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What are the courts making of this? Some district court cases, many BPAI cases Compilation of post-Bilski and other subject

matter-based opinions available at www.aipla.org/MS/ElectronicandComputerLaw

Take-away lessons?

Fort Properties Inc. v. American Master Lease (C.D. Cal. 1/22/09)

Method for creating real estate investment instrument Aggregating real property, encumbering property,

creating plurality of deedshares by dividing title PTO ok’s under State Street (useful, concrete,

tangible), ct kills under Bilski (machine-or-transformation) Need not be performed by machine Manipulates only legal ownerships (not physical)

Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)

Method & Beauregard claims A method for verifying credit

card transaction over the Internet Obtaining information about other transactions; Constructing a map of credit card numbers based

on other transactions; and Utilizing map to determine if transaction is valid.

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Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)

No transformation Credit card numbers are not

physical or representations Abstraction only – relationship

between card holder and card issuer No machine

“Over the internet” does not tie to a particular machine

Internet = abstraction, no meaningful limit

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Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)

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Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)

No exemption from Bilski test for Beauregard-type claims

Programmed computer (generality) = not machine

Process steps = not transformation

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Every Penny Counts Inc. v. Bank of America Corp. (M.D. Fla. 5/27/09)

System (for payors to donate) comprising: A network; Entry means coupled to network; Identification entering means in entry means & coupled to

network; Said network having computing means

Having data concerning payor Being responsive to data about payment Apportioning excess payment

Every Penny Counts Inc. v. Bank of America Corp. (M.D. Fla. 5/27/09)

System = process for § 101 purposes (???) “Simply because the process at issue requires

machine or computers to work, however, does not mean that the process or system is a machine.”

No transformation, no machine = not eligible for patenting

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A Sampling of Cases from the Board

BPAI Case Sampler – Algorithms Ex parte Cornea-Hasegan (2008-4742, 1/13/09)

Method for predicting result of floating point mathematical operations & calculating results No machine (general processor, unspecified

programming) No transformation (just numbers) “A computer readable media” including program for

predicting result…= article of manufacture, but fails under Bilski

BPAI Case Sampler - Machines Ex parte Uceda-Sosa (2008-1632, 11/18/08)

Method of representing information Middleware module to represent & store information

A library having a module to generate an information container, said module allowing for (the claimed method)

An apparatus to represent & store information A storage unit containing a library having a module to generate

information container, said module allowing for (method)

A signal-bearing medium tangibly embodying a program of machine readable instructions to perform the claimed method

BPAI Case Sampler - Machines Method claim fails machine-or-transformation Middleware claim fails because functionally

descriptive “[M]odule is simply a computer software module that is used

to represent and store information . . . However, the claimed software module is not tangibly embodied on a computer-readable medium [and is therefore functional descriptive material].

Apparatus claim are §101 subject matter Signal claim fails under Nuijten

BPAI Case Sampler - Software Ex parte Seshadri (2008-2854, 2/27/09)

A computer implemented notification system comprising the following computer executable components: A component executing on a computer… A database engine…; and A notification server…

Examiner said software per se; BPAI says no Claims recite “a component executing on a computer”,

not software per se (OK under§ 101)

BPAI Sampler – Computer Media Ex parte Bo Li (2008-1213, 11/6/08)

Computer usable medium having computer readable program embodied thereon

BPAI reverses examiner’s § 101 rejection Nuijten does not remove validity of Beauregard

claims

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BPAI Sampler – Computer Media Ex parte Kumar (2008-1649, 11/19/08)

Tangible computer accessible medium, comprising software instructions executable to implement

BPAI doesn’t act under § 101, but cautions that a “computer readable medium comprising a modulated signal” may not be statutory subject matter post-Nuijten

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BPAI Sampler – Computer Media Ex parte Brubacher (2008-1508, 1/22/09)

Computer-readable medium having computer-executable instructions…

BPAI upholds examiner’s § 101 rejection because “computer-readable medium having computer-executable instructions” encompasses signals, not subject matter per Nuijten

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BPAI Sampler – Computer Media Ex parte Salesin (2008-2578, 5/22/09)

Computer-readable medium having computer-executable instructions…

BPAI initiates § 101 rejection “[A] computer readable medium includes a signal

embodied in a carrier wave. A signal embodied in a carrier wave is not statutory subject matter because it does not fall within any of the four categories of statutory subject matter. See In re Nuijten.”

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BPAI Sampler – Data Structures Ex parte Hoya (2008-0024, 2/26/09)

A memory system adapted to model physiological functions…comprising: A short-term memory neural network unit; and A long-term memory neural network unit…

Not statutory subject matter under Bilski and Nuijten because claim can cover embodiment lacking tangible structure

BPAI Sampler – Data Structures Ex parte Klosterman (2008-1649, 4/20/09)

A computer program product for use in an information handling system…comprising a plurality of instructions

BPAI initiates § 101 rejection A ‘computer program product’ does not fall within any of

the four classes of § 101. … These claims recite a ‘computer program product’ data structure…There is no claim language . . . which defines any structural and functional interrelationship between the data structure and the computer.

BPAI Sampler – Refining Bilski Ex parte Sesek (2009-0458, 3/25/09)

Method of notifying a mail carrier of anticipated load by monitoring mail, producing a forecast, notifying mail carrier of forecast, and notifying of changes

Not tied to a machine Not a transformation, does

not transform mail or any article Transmits a forecast, not physical or representation

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BPAI Sampler – Refining Bilski Ex parte Harris (2007-0325, 1/13/09)

Method of conducting an auction over a network Allowing users to submit bids over network Collecting bids on server Defining secret rules for auction

Not machine Network, server not specified electronic, could be

human (and not limited)

Not a transformation (data isn’t physical)

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BPAI Sampler – Refining Bilski Is it AND or OR?

Ex parte Becker (2008-2064, 1/26/09) “To the extent that Appellants’ claims may transform

data, we note that transformation of data, without a machine, is insufficient to establish patent eligibility under § 101.”

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BPAI Sampler – None of the Four Ex parte Daughtrey (2008-0202, 4/8/09)

A user interface…comprising a fare evaluation result table. “User Interface” is not one of the four categories

Ex parte Johnson (2009-0470, 6/10/09) A network collaboration tool . . . comprising web

browser software, a graphical collaboration tool, and a server process “Network collaboration tool” is not one of the four

Pointy Headed Thoughts What’s wrong with Bilski

“Problems” with business method patents How they should handle the problems

Special issues for tax methods

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Take Away Lessons? (from scratch)

Add a machine [method step ] “by a programmed computer” Make sure there’s support in the spec for

exemplary hardware Use non-signal computer readable media

“storage devices” Multi-format claims

Machine, process, article of manufacture

Take Away Lessons? (pending/issued)

Add a machine and/or non-signal computer readable media…if you can Support in spec is great Inherency/PHOSITA argument if not

Tougher path but it could work

Potential for reissue? New interpretation of § 101 can help meet reissue

standard (invalid because patentee claimed more or less than he had a right to do so)