Month: June 2010

Post Bilski Commentary For Software Startups

By now you’ve probably read about the “Bilski” decision recently released by the Supreme Court. Most of the coverage has been more focused on the policy aspects of the decision. This post focuses on where a software startup stands from a patent prosecution perspective in light of the decision.

Stepping back for a moment, I’d like to clarify the terms business method and software. In the coverage of the decision, the terms business method patent and software patent have sometimes been used interchangeably. The software startup should have a deeper understanding, as the Supreme Court states a holding for business method patentability but not directly for software patentability. The term business method usually refers to processes for doing business where the process does not require any tangible elements. An example might be a process for administering and accounting for mutual funds. Software, as popularly understood, is generally a set of instructions to be executed by a computer. In the case where the software of a patent application implements a business method, that software might be claimed in the same manner as a business method ie without any tangible elements. In other cases, the subject matter of the software patent application may lead to claiming the software in a different manner. For example, in software that processes radio waves reflected from a surface and generates images, the tangible components, such as a processor, may be claimed. Thus some “software” may fall directly within the scope of the recent decision and some may not.

In the Bilski decision, the Supreme Court rejected the exclusive use of the more restrictive “machine or transformation” test for business method patent applications, which essentially required tangible elements in the claims. It stated that machine or transformation test may be useful, but other tests may also determine whether the patent application contains eligible subject matter. Unfortunately, the Court did not provide any other specific tests, leaving it to future courts to do so.

It should be stated that the Court expressly refused to rule on the patentability of software, stating “[it] is important to emphasize that the Court today is not commenting on the patentability  of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection.” However, the Court also quoted an older court decision saying to “freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology[,] … is not our purpose.” I believe a fair inference from this and prior decisions is that software will remain largely patentable. Thus the software startup seeking patent protection should view the decision favorably.

Patents – An Overview of the Application Process

Frequently, the creator of an innovative new product or process may seek patent rights in order to exclude others from practicing the new product or process. The typical steps involved in the process of applying for a patent include:

  1. performing a search;
  2. preparing and filing  a patent application; and
  3. responding to rejections raised by the patent office.

A search is not required by law before submitting a patent application, but it may be prudent to do so. The search can help determine whether a patent application should be filed. Moreover, if a patent application is filed, locating prior and related literature can help the inventor and patent attorney focus on the key features of the invention. The search sources can vary, but may include a general internet search, United States patent records, European patent records, Japanese patent records, commercial patent databases, industry databases, and trade journals.

After the search report is reviewed and discussed, a decision may be made to proceed with a patent application. Additional details for the invention may then be gathered. The inventor and patent attorney will work together to collection sufficient data in order to illustrate the invention, describe how to make and use the invention, and disclose the best manner of practicing the invention. From all of the disclosure, drawings, a specification, and claims will be included in a patent application filed with the patent office.

In time, about one to three years after filing, the patent office will review the submitted patent application for compliance with patent law. The patent office will perform its own patent search, as well as review the application for other compliance issues. Common issues raised by the patent offices include:

  • Ineligible subject matter – An invention’s subject matter must be products or processes made by man. Impermissible subject matter includes laws of nature and abstract ideas. Recent controversial and developing categories of subject matter include business method patents (in which some software may fall) and “gene” patents.
  • Lack of novelty – An invention must not currently exist in order to be patentable. In other words, it must not already be publicly known. If a reference document contains all of the features of the claimed invention, the invention lacks novelty and the patent office will issue an anticipation rejection.
  • Obviousness – Not only must the invention be novel, it also must be nonobvious. That is to say that the invention should not be obvious to a person having ordinary skill in the field of technology of the patent application reviewing reasonably related references. If it is obvious, the patent office will reject the patent application.

The patent applicant and attorney need to address the rejections raised by the patent examiner. If successful in addressing those rejections, a patent will issue and the inventor may then exclude others from practicing the new product or process.