The following is a LIFO (last in first out) list of Post-Bilski Federal Circuit software patent claims with statutory/non-statutory labels, links and reasoning from the respective cases. Thoughts on a coherent synthesis?

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Claim 1: A life insurance policy management system comprising:
a policy generator for generating a life insurance policy including a stable value protected investment with an initial value based on a value of underlying securities of the stable value protected investment;
a fee calculator for calculating fees for members of a management group which manage the life insurance policy;
a credit calculator for calculating credits for the stable value protected investment of the life insurance policy;
an investment calculator for determining an investment value and a value of the underlying securities of the stable value protected investment for the current day;
a policy calculator for calculating a policy value and a policy unit value for the current day;
digital storage for storing the policy unit value for the current day; and
a debitor for removing a value of the fees for members of the management group which manages the life insurance policy.

Non-Statutory – Bancorp Services v. Sun Life Assurance (July 26, 2012) “As we explained above, the computer limitations do not play a “significant part” in the performance of the claimed invention. And unlike in CLS, the claims here are not directed to a “very specific application” of the inventive concept; as noted, Bancorp seeks to broadly claim the unpatentable abstract concept of managing a stable value protected life insurance policy.”

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Claim 33: A method of exchanging obligations as between parties, each party holding a credit record and a debit record with an exchange institution, the credit records and debit records for exchange of predetermined obligations, the method comprising the steps of:
(a) creating a shadow credit record and a shadow debit record for each stakeholder party to be held independently by a supervisory institution from the exchange institutions;
(b) obtaining from each exchange institution a start-of-day balance for each shadow credit record and shadow debit record;
(c) for every transaction resulting in an exchange obligation, the supervisory institution adjusting each respective party’s shadow credit record or shadow debit record, allowing only these [sic] transactions that do not result in the value of the shadow debit record being less than the value of the shadow credit record at any time, each said adjustment taking place in chronological order; and
(d) at the end-of-day, the supervisory institution instructing one of the exchange institutions to exchange credits or debits to the credit record and debit record of the respective parties in accordance with the adjustments of the said permitted transactions, the credits and debits being irrevocable, time invariant obligations placed on the exchange institutions.

Statutory – CLS Bank v. Alice (July 9, 2012) – “it is difficult to conclude that the computer limitations here do not play a significant part in the performance of the invention or that the claims are not limited to a very specific application of the concept of using an intermediary to help consummate exchanges between parties. The dissent criticizes the majority for failing to explain “why the specific computer implementation in this case brings the claims within patentable subject matter,” Dissent 3, but this criticism is misplaced. The limitations of the claims as a whole, not just the computer implementation standing alone, are what place meaningful boundaries on the meaning of the claims in this case. The asserted claims appear to cover the practical application of a business concept in a specific way, which requires computer implemented steps of exchanging obligations maintained at an exchange…”

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Claim 1: A method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising: (1) aggregating title to real property to form a real estate portfolio; (2) encumbering the property in the real estate portfolio with a master agreement; and (3) creating a plurality of deedshares by dividing title in the real estate portfolio into a set of tenant-in-common deeds, each of the plurality of deedshares subject to a provision in the master agreement for reaggregating the plurality of tenant-in-common deeds after a specified interval.

Claim 32: A method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising:
acquiring real property;
encumbering the real property with a master agreement; and
using a computer to generate a plurality of deedshares by generating a plurality of tenant-in-common deeds of at least one predetermined denomination that divide title in the real property into a plurality of tenant-in-common interests, each of the plurality of tenant-in-common deeds being subject to a provision in the master agreement for reaggregating the plurality of tenant-in-common deeds after a specified interval.

Non-Statutory – Fort Properties v. American Master Lease (Feb. 27, 2012) – An abstract concept cannot be transformed into patentable subject matter merely because of connections to the physical world through deeds, contracts and real property. Also, claims 32-41, which required a computer to generate a plurality of deedshares, did not “‘play a significant part in permitting the claimed method to be performed’…Without more, claims 32-41 cannot qualify to be patent eligible.”

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Claim 1: A computer aided method of managing a credit application, the method comprising the steps of: [A] receiving credit application data from a remote application entry and display device; [B] selectively forwarding the credit application data to remote funding source terminal devices; [C] forwarding funding decision data from at least one of the remote funding source terminal devices to the remote application entry and display device; [D] wherein the selectively forwarding the credit application data step further comprises: [D1] sending at least a portion of a credit application to more than one of said remote funding sources substantially at the same time; [D2] sending at least a portion of a credit application to more than one of said remote funding sources sequentially until a finding [sic, funding] source returns a positive funding decision; [D3] sending at least a portion of a credit application to a first one of said remote funding sources, and then, after a predetermined time, sending to at least one other remote funding source, until one of the finding [sic, funding] sources returns a positive funding decision or until all funding sources have been exhausted; or, [D4] sending the credit application from a first remote funding source to a second remote finding [sic, funding] source if the first funding source declines to approve the credit application.

Non-Statutory – Dealertrack, Inc. v. David L. Huber and Finance Express (Jan. 20, 2012) – “Simply adding a ‘computer-aided’ limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible.”

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Claim 12: A method of reducing a step of visibility computations in 3-D computer graphics from a perspective of a viewpoint, the method comprising:
computing, before said step and from said perspective, the visibility of at least one entity selected from 3-D surfaces and sub-elements of said 3-D surfaces, wherein said computing step comprises:
employing at least one projection plane for generating projections with said selected set of 3-D surfaces and said sub-elements with respect to said perspective; identifying regions on said at least one projection plane, wherein said regions are related to the projections associated with said selected 3-D surfaces, said sub-elements, or bounding volumes of said 3-D surfaces or said sub-elements;
updating data related to said regions in computer storage; and
deriving the visibility of at least one of said 3-D surfaces or said sub-elements from the stored data in said computer storage; and
skipping, at said step of visibility computations, at least an occlusion relationship calculation for at least one entity that has been determined to be invisible in said computing step.

Non-Statutory – FuzzySharp v. 3DLabs (Nov. 4, 2011) – a reference to a basic computer function in the claim (the ability to compute and store data in memory) “does not confine the preemptive effect of the claim because the underlying method has ‘no substantial practical application except in connection with a digital computer.’ Those limitations are therefore not ‘meaningful limits’ on the claim’s scope.”

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Claim 1: A method for distribution of products over the Internet via a facilitator, said method comprising the steps of: (1) a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data; (2) a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message; (3) a third step of providing the media product for sale at an Internet website; (4) a fourth step of restricting general public access to said media product; (5) a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message; (6) a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product; (7) a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer; (8) an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message; (9) a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query; (10) a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and (11) an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

Statutory – Ultramercial v. Hulu and WildTangent (Sept. 15, 2011) – Many of the claimed steps are likely to require “intricate and complex” computer programming. Certain claimed steps require specific application to the Internet and a cyber-market environment. “Viewing the subject matter as a whole, the invention involves an extensive computer interface.”

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Claim 3: A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:

a) obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;
b) constructing a map of credit card numbers based upon the other transactions; and
c) utilizing the map of credit card numbers to determine if the credit card transaction is valid.

Non-Statutory – CyberSource v. Retail Decisions (Aug. 16, 2011) “(i)t is clear that unpatentable mental processes are the subject matter of Claim 3. All of Claim 3’s method steps can be performed in the human mind, or by a human using a pen and paper. Claim 3 does not limit its scope to any particular fraud protection algorithm, and no algorithms are disclosed in the ‘154 patent’s specification. Rather, the broad scope of Claim 3 extends to essentially any method of detecting credit card fraud based on information relating past transactions to a particular ‘Internet address,’ even methods that can be performed in the human mind.”

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Claim 1: A method for the halftoning of gray scale images by utilizing a pixel-by-pixel comparison of the image against a blue noise mask in which the blue noise mask is comprised of a random non-deterministic, non-white noise single valued function which is designed to produce visually pleasing dot profiles when thresholded at any level of said gray scale images.

Statutory – RCT v. Microsoft – (Dec. 8, 2010) “the invention presents functional and palpable applications in the field of computer technology” and “[I]nventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act.”

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“In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.” This concluding statement by the Supreme Court in Bilski unfortunately foreshadowed a maze of recent cases that make it difficult to know when software and medical methods are patentable.

What guidance do you see from the most recent cases?

Thankfully, the Federal Circuit is bringing normalcy back to recent statutory subject matter debates for software and business methods in view of Bilski. As we predicted, the case of RCT v. Microsoft is the first case in which the Federal Circuit has spoken substantively about the Supreme Court’s Bilski decision, and the bar of “abstract idea” invalidity has been raised back closer to where it was for the last 10 years after State Street.

The court noted that the Supreme Court, as was urged in AwakenIP’s Amicus Brief, “did not presume to provide a rigid formula or definition for abstractness,” thus “With that guidance, this court also will not presume to define ‘abstract’ beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.”

Looking at the patents at issue, the court went on to note that “the invention presents functional and palpable applications in the field of computer technology”, referencing the patent specification (as we also predicted would play a role in the decision, based on the oral arguments in this case). The court also stated, “[I]nventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act.”

Most importantly, the court did not analyze the statutory subject matter issue in the context of the Machine or Transformation (MOT) test from Bilski. Accordingly, we now appear to have a new test for determining subject matter eligibility, particularly for claims that do not explicitly includes computers/machines or produce transformations.

Of course, this case is not likely to be the last word on patent eligibility. It is only one panel decision, and Microsoft will likely request en banc review. Regardless, other panels are not likely to be as friendly to software and business method patents in the future. Therefore, this case is probably the first in what will be a long string of decisions that try to establish the new test for patentable subject matter.

The U.S. Patent Office has today released new Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos.

This Interim Bilski Guidance is said to be used “as a supplement” to the previously published Memorandum to Patent Examining Corp Regarding the Supreme Court Decision in Bilski v. Kappos issued on June 28, 2010 and its Interim Examination Instructions originally issued on August 24, 2009.

Public comments are requested by September 27, 2010, and more specifically, answers to the following questions are requested:

1. What are examples of claims that do not meet the machine-or-transformation test but nevertheless remain patent-eligible because they do not recite an abstract idea?

2. What are examples of claims that meet the machine-or-transformation test but nevertheless are not patent-eligible because they recite an abstract idea?

3. The decision in Bilski suggested that it might be possible to ‘‘defin[e] a narrower category or class of patent applications that claim to instruct how business should be conducted,’’ such that the category itself would be unpatentable as ‘‘an attempt to patent abstract ideas.’’ Bilski slip op. at 12. Do any such ‘‘categories’’ exist? If so, how
does the category itself represent an ‘‘attempt to patent abstract ideas?’’

As usual, links to these materials and “all things Bilski” are available at http://AwakenIP.com/Bilski.

While there are at least eight (8) cases before the Federal Circuit that could be the court’s first word on patentable subject matter after the Supreme Court’s Bilski v. Kappos opinion, my prediction is that the first decision to provide additional guidance for computer software will be Research Corp. Tech (RCT) v. Microsoft. Furthermore, I predict that the court will expand/clarify the scope of patentable subject matter to clearly include subject matter that has no realistic application outside of the computer art. There are several reasons for these predictions.

First, while many 101 cases pending before the Federal Circuit were stayed or are not as far along (CyberSource, Fort Properties, DealerTrack, FuzzySharp, and Every Penny Counts), RCT was not stayed. Second, the Prometheus and Classen cases may need additional briefing or oral arguments after the grant-vacate-remands (GVRs) from the Supreme Court. Third, the oral arguments for RCT were held on June 9, 2010, and the judges were Chief Judge Rader, Judge Newman, and Judge Plager. One important thing about the identity of this panel is that both Chief Judge Rader and Judge Newman dissented in the Federal Circuit’s Bilski decision, and more particularly, Judge Rader essentially argued for what the Supreme Court ultimately decided, i.e., that the Bilski claims should simply have been rejected as an abstract idea.

Fourth, while my prediction about the explansion/clarification of the standard is based in part on the composition of the panel, it is also based on the oral arguments in the case. More particularly, Judge Rader’s questions suggested that the “subject matter” of the specification is important to consider, regardless of whether a patent attorney happened to remember to stick a “computer” in the claims or not. To illustrate, it is important to know a few more details about the the RCT case.

Five (5) patents were examined by the District Court, three of which satisfied 101 because of the claimed production of an “image,” in keeping with the In re Abele case. However, two of the patents failed to claim patent eligible subject matter. One representative claim is as follows:

1. A method for the halftoning of gray scale images by utilizing a pixel-by-pixel comparison of the image against a blue noise mask in which the blue noise mask is comprised of a random non-deterministic, non-white noise single valued function which is designed to produce visually pleasing dot profiles when thresholded at any level of said gray scale images.

Questions by Judge Rader during oral argument seemed to suggest that since the general subject matter of the specification was clearly limited to the computer arts, the failure to mention a “computer” in the claim will not result in the claims being classified as abstract ideas. In other words, even though the District Court suggested that the invalid claimed methods could theoretically be performed by hand, the Federal Circuit may hold that if such performance is not practical as described, there is little risk of abstract idea preemption since the subject matter is accordingly limited to the computer art. Such a conclusion would be very useful since the “display” step of the In re Abele case is not always present in otherwise innovative software advances, such as with transmission instead of displaying or printing.

The U.S. Board of Patent Appeals and Interferences (BPAI) has released its first opinion citing the U.S. Supreme Court case of Bilski v. Kappos. With a Notification Date of today, July 12, 2010, the case is Ex Parte Proudler, Appeal 2009-006599, Serial No. 10/643,306, Tech. Center 2400, Decided July 7, 2010. The BPAI rejected all of the pending claims under section 101 as a new ground of rejection, citing Bilski v. Kappos.

The rejected independent claims were as follows:

1. A method of controlling processing of data in a computer apparatus, wherein the data comprises a plurality of usage rules for a plurality of data items stored by said computer apparatus, and comprising:
applying individualised usage rules to each of the data items based on a measurement of integrity of a computing entity to which the data items are to be made available, said data items being logically grouped together as a set of data items, and
instantiating the set of data items at the computing entity depending upon the integrity of the computing entity and the usage rule applicable to each data item in said set.

33. A method of controlling processing of data, wherein the data comprises a plurality of rules associated with a plurality of data items comprising a set of logically related data items, each data item in the set having a rule associated therewith, said rules acting to individually define usage and/or security to be observed when processing each of the data items in the set of data items, and in which forwarding of the set of data items is performed in accordance with mask means provided in association with the rules.

43. A computer program stored on computer readable media for instructing a programmable computer to implement a method of controlling the processing of data, wherein the data comprises a plurality of usage rules for a plurality of data items, the programmable computer being programmed to apply individualized usage rules to each of the data items based on a measurement of integrity of a computing entity to which the data items are to be made available, the computer program permitting instantiation of the data items at the computing entity only if the integrity of the computing entity complies with the individualised usage rules associated with said data items.

50. A computer apparatus for controlling processing of data, wherein the data comprises a plurality of usage rules for a plurality of data items stored by said computer apparatus, said computer apparatus controlling instantiation of the data at a computing entity, said computer apparatus including:
programming for applying individualised usage rules to each of the data items based on a measurement of integrity of the computing entity to which the data items are to be made available, said data items being logically grouped together as a set of data items, and
programming for individually instantiating data items in the set of data items at the computing entity as a function of the integrity of the computing entity and the usage rule applicable to each data item in said set.

Thanks to All Things Pros for noticing the publication of the decision. In addition, I am going to try to continue keeping a list of all decisions citing Bilski v. Kappos at http://www.AwakenIP.com/Bilski, so please let me know of any additional cases.

On June 28, 2010, the U.S. Supreme Court published its long awaited decision in Bilski v. Kappos. In a split decision, the Court rejected the machine-or-transformation test as the exclusive test for patent eligibility and refused to categorically exclude business method patents. However, the claims as then presented in the Bilski application were also rejected, with the Court relying on prior precedent to find the claims unpatentably abstract.

Inventors Bernie Bilski and Rand Warsaw commented on the decision. According to Bernie Bilski, “We are personally disappointed that the Supreme Court ruled against our claims. However, we are very pleased that the Court maintained the patentability of business methods and other new areas of development.” Rand Warsaw added, “We are happy that the Court agreed with our arguments that the machine-or-transformation test is too narrow, but it would also have been nice to receive a patent after more than 10 years.”

While it was somewhat surprising that the Supreme Court did not seize this opportunity to create a new test for patent eligibility by clarifying the “abstract idea” exception, this was the resulted advocated by AwakenIP in its Amicus Brief. More particularly, AwakenIP urged the Court to avoid further “abstractions of abstractions,” recognizing the danger of fashioning additional tests that use the abstractions of words to define “abstract ideas.” Nonetheless, in characterizing its prior decisions in Benson, Flook & Diehr, the Court did offer some guidance that will surely be the subject of intense discussion among patent attorneys and commentators for many months.

What happens next for Bilski & Warsaw? Attorneys will now work within the guidance provided by the Court to revise the Bilski/Warsaw claims and obtain patent protection. According to Mike Jakes, the attorney at Finnegan Henderson who argued the case to the Court, “In reaffirming that section 101 of the Patent Act should be interpreted broadly, the Court’s decision will encourage continued innovation in today’s information economy.”

Sitting in the U.S. Supreme Court next to my clients, Bernie Bilski and Rand Warsaw, I wondered what they were thinking as the Justices inquired about horse whispering, speed dating, and tax evasion methods. While we on the Bilski v. Kappos litigation team may have anticipated many of the questions from the Justices, what perspectives might these beleaguered inventors have in common with others who may now think twice before filing patent applications or innovating in the first place? On December 17, 2009, Bernie and Rand shared many of their thoughts about the current state of the patent system with the Software and Business Methods Committee of the Intellectual Property Owners (IPO) Association, and this article is a paraphrase of that discussion.

Note: AwakenIP is attempting to maintain the most comprehensive online resource of all information related to the Bilski case at http://AwakenIP.com/Bilski. Please forward any additional information to Jeff@AwakenIP.com.

Question: What was the origin of the invention at issue in the Bilski-Warsaw patent application?

Bernie: The idea grew out of an effort to determine how to gain a competitive edge during energy deregulation. To use a residential mortgage analogy, energy consumers typically only receive the equivalent of an adjustable rate mortgage (ARM), but many of them prefer a fixed rate mortgage, so we set out to determine how to provide that product. But the problem was dealing with the volumetric risk and, in particular, the weather risk. After a lot of hard work, we figured out how energy companies could manage that risk, and based on our new idea, we started a company with an energy management product being the key product offering. Our business strategy was to quickly gain market share and related economies of scale by offering the new product in a deregulating energy market, and we were making good progress. Unfortunately, the slow pace and other aspects of deregulation severely limited market access. In addition, we faced the dilemma of working with bigger companies and providing them enough details to prove to them that the idea worked without enabling them to take the idea from us.

Rand: A number of patent blogs have said that our invention is obvious, but when we started, nothing like our invention was known. Volumetric energy hedging had never been done, but now some utilities are doing it, so the writers of the blogs are way off. Bernie and I went through agony trying to explain the concept to industry people who did not believe the idea would work.

Bernie: In a number of instances, it took up to 6 months with some of the largest energy companies for them to even understand the idea, and in the end, they took the idea themselves. Having had a patent would definitely have made a big difference. However, we actually never wanted to depend on the patent but had hoped to launch quickly to be able to depend on a timing lead and on economies of scale. Unfortunately, the large companies that took the idea for themselves and the slow pace of deregulation prevented this from happening. In addition, there were miscues that took place with some of the eventual implementations that might have been prevented with the leverage of a patent.

Question: What is it like to not have a patent after over 12 years?

Bernie: We ended up simply not thinking about it because our timeframe was so much shorter than that of the current patent system, unfortunately, so the slow timing and uncertainty dampened all enthusiasm that we might have had. Those very factors often prevent other people from relying on the patent system too.

Rand: I am frankly so soured on the patent system that I may never file another patent application in my entire life. It’s not just this application, but the whole patent process is stilted toward large companies as a big money game. First, it costs $10-20K to do a really nice job with a patent application, and then it costs much more as patent attorneys fight for the broadest scope against patent examiners who often do very poor searches and then negotiate with each other to a point that any resulting patent only protects a very specific and narrow aspect of an invention. After that, as in my case, I’ve had large corporations do an end run around my inventions, and I simply cannot spend $1-2M each fighting them through litigation. As an entrepreneur/inventor/person who raises money for my companies, the patent system is a rich man’s game, and as I learned not to play poker with millionaires because they will simply raise the stakes until I can’t keep up, large corporations will eventually raise the litigation stakes until I lose.

Question: If you decide not to play the patent game, what would you rely on to protect yourself?

Rand: Our company is now almost paranoid with respect to protecting trade secrets. Not one person understands all of our mathematics, for example. In the future, I will be going with low technology turnarounds, regional marketing advantages, installed capital bases, etc. I’m throwing away a huge amount of investment in my background, but in my opinion, you can only work for a large company in this area because there is nothing you can own on your own.

Bernie: Any time there is uncertainty in the law, it works to the favor of those with deep pockets. Looking at it from the other side, there are probably also disadvantages that go with deep pockets too, but the unfortunate thing about Federal Circuit decision in our case is that the court had an opportunity to reduce uncertainty, and it is truly a shame they did not reduce it. Going forward, I would simply not start a business ever counting on getting patent protection. Of course, having patent protection could still be useful, but no one should factor that into their decision process.

Rand: Small entrepreneurs can’t invest enough to cure cancer or engineer new types of telecom systems with new space satellites, which speaks to the necessity of big money investments in patents. However, we also need to create a level playing field between large and small. Apple and Microsoft first started very small, and it’s important to protect those opportunities, so we need certainty in the rules up front. We also need more of a presumption that a patent is valid until it is truly proved invalid. Using new obviousness attacks, large companies are now too easily and inexpensively able to invalidate patents owned by small companies. Courts or Congress should make it more expensive to challenge the validity of a patent, especially if the challenger loses.

Question: What was it like at the Supreme Court?

Bernie: It was really awesome. I recognize that a lot of coincidences got me there, but the questions from the Court truly outlined the dilemma that they have. On one hand, they need to exclude things that should not be patented, but on the other hand, they must keep the gate open for worthwhile inventions in new areas. In general, everything went well, but I was unfortunately chewing gum in the gallery and was embarrassingly admonished by a rather serious looking courtroom official for doing so. Of course, I immediately swallowed it, but then I remembered what my mother told me about it staying there forever.

Rand: I was actually afraid the Marshall was coming after me. Of course, I thought all of the attorneys at Finnegan did a great job, and Jeff Kuester also did a great job preparing us, so I was very pleased. The biggest surprise to me was that even though I do not philosophically agree with about half of the Court, I was amazed at how fast and quick witted they all are. This does not come across in the news coverage of them. I was actually floored by the quality of questions and the even handed treatment of both sides of the argument was impressive.

Question: Have you tried to get protection outside the U.S., and what do you think of the patent systems of other countries?

Rand: We have filed some in Canada, but we are not well healed enough to file in the EU.

Bernie: Business processes should be patentable, so I would not prefer the EU system here.

Rand: If you don’t protect business processes, you don’t get a lot of investment in them. It takes less than 1/10 of the cost to steal rather than to develop. Unless you can exercise an extreme first mover advantage, why bother? Betamax was 10 times the technology VHS was, but VHS pushed them out real fast.

For more comprehensive information on Bilski v. Kappos, see the continuously updated resource at http://AwakenIP.com/Bilski.

In the U.S. Supreme Court case of Bilski v. Kappos, the Brief for the Respondent has been filed by the U.S. Departments of Commerce and Justice and the Patent and Trademark Office. The arguments are organized into the following sections:

I. Section 101 protects industrial and technological processes, and it excludes methods directed to organizing human activity

A. Section 101 sweeps broadly but imposes meaningful limits on the scope of patent protection

B.The term “process” in Section 101 encompasses technological and industrial processes but excludes methods of organizing human activity

1. The historical meaning of the terms “process” and useful “art” demonstrates that only technological and industrial processes are patent-eligible

2. The statutory context confirms that only technological and industrial methods are patent-eligible “processes”

C. A patent eligible “process” under Section 101 is one that concerns the operation of a particular machine or apparatus or effects a transformation of matter into a different state or thing

1. This Court has consistently used the machine-or-transformation test to identify patent-eligible processes

2. A process is patent-eligible if it concerns the operation of a machine or effects a transformation of matter into a different state or thing

3. The machine-or-transformation test accommodates evolving technology

4. The alternative tests for patent-eligibility proposed by petitioners and amici do not appropriately limit patent protection

II. Section 273 does not implicitly expand the categories of patent-eligible subject matter in Section 101

III. The court of appeals correctly rejected petitioners’ claimed method of hedging financial risk under Section 101

The Federal Trade Commission (FTC) recently completed a series of hearings that are discussed in my current article in IAM Magazine, entitled “Evolution of the IP Market.”  There were quite a few interesting statements from such people as:

• Peter Detkin of Intellectual Ventures,
• Paul Ryan of Acacia,
• Ken Massaroni of Seagate,
• Jim Malackowski of Ocean Tomo,
• Professor Mark Lemley of Stanford.

For example, Paul Ryan stated that they have generated $75 Million for their inventor partners, and Peter Detkin commented, “innovation is what drives this economy” and “innovators deserve to be paid.”

However, Professor Mark Lemley noted that the current market for IP is “thin” because there is a lack of transactional transparency, difficulty in distinguishing good from lousy IP, and uncertainty throughout the entire range of the patent system.