The importance of detail in software patent applications (and practically speaking, other categories) cannot be understated. The video discusses some issues around detail in a patent application.
Computer Matchmaking started in the 1960s. Match, Zoosk, and umpteen others have added to the field since then. Expanding upon the insufficiently detailed “dating app” example in the video, the start of a more detailed seed of disclosure for a theoretical patent application would be a dating app with an algorithm that minimizes “catfishing” risk and similar scams by sampling polling the GPS, logging IP addresses, and accessing known Wifi/Bluetooth/NFC beacons. The IP addresses are geolocated and the locations of the beacons are retrieved. The locations from the three sources are compared with the location listed on that dating file. When that person contacts another person, a location probability score is generated, with a high score being that all location sampling input is available and matches each other over time, that location sampling input matches the location on the dating profile, and that location sampling input matches the location on contacted person’s dating profile.
Make an effort to describe the meaningful inventive aspects, that is to say what you have done that other innovators have not. It’s highly unlikely that a patent will be granted for just a “broad idea.”
Stating that an “algorithm” is performed is rarely helpful. Disclosing the steps in the algorithm, the inputs, the processing, and the output for each steps is more meaningful disclosure.
There are a lot of innovative people in the world. A patent application for just “a dating app,” “a social media app,” or a “security app” is fraught with higher risk and higher cost.
Below are excerpts of slides from my presentation at an American Chemical Society meeting where I mention the possible impact of the recent Alice v. CLS Bank Supreme Court decision on chemical inventions.
1. What Can Be Patented?
35 U.S.C. 101 – Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.
Inventions must be useful, novel, and non-obvious
2. Broad Types of Chemical Innovation
Compounds
Syntheses/manufacture
Modeling
Analytical instruments
Analytical processes
Diagnostic kits/diagnostic reagents
Microorganisms, virology, genetics
Vaccines
Plants
Medical devices
3. Alice v. CLS Bank
Invalidated claims generally directed to a computerized method for performing a “form of escrow” designed to mitigate the risk that only one party to a financial transaction will perform its contractual obligations at settlement.
Invalidated claims recite computer-implemented methods of settling financial transactions, as well as computer-readable media capable of storing, and generic computer systems capable of running, programming instructions for performing the claimed method.
Claims directed to an “abstract” idea or a “generic computer” implementation of an abstract idea are ineligible for patent protection
Imposed significant additional requirements
4. What is “Software?”
Generally two main aspects for any type of software:
Algorithms, methods, and other general concepts that describe, at a high level, how the software operates; and
Actual computer code for implementing these concepts.
Patents – generally seek to protect the former
5. Software-Based Patents After Alice v. CLS?
USPTO Examination (still developing)
Is the claim directed to an “abstract” idea?
If so, are there other claim features that show a patent-eligible application of the abstract idea, e.g., more than a mere instruction to apply the abstract idea?
Recently, the United States Supreme Court decision in Alice v. CLS Bank ruling impacted the scope of software patents. Some opined that software was no longer patentable. The United States Patent & Trademark Office even withdrew notices of allowance for some of patent applications due to the presence of at least one claim having an “abstract idea.” Software and computer implemented inventions are impacted but the change in scope of impact will probably remain unclear for some time to come. The Supreme Court did not abolish software patents but it has increased the standard for eligibility of software patents.
Specifically, the United States Supreme Court unequivocally stated that if you have an idea so abstract that it cannot be patented, simply tying it to a “generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” It also stated that tying an abstract idea to “purely functional and generic” hardware similarly would not make the idea patentable.
The United States Patent & Trademark Office (USPTO) issued preliminary guidelines in response to the decision. The guidelines provides a two step analysis which will apply to process and system claims.
For the first step, determining whether the claim is directed to an abstract idea, the memorandum provides four examples of abstract ideas referenced in Alice:
Fundamental economic practices;
Certain methods of organizing human activities;
An idea of itself; and
Mathematical relationships/formulas
If an abstract idea is present in the claim, the examiner should proceed to the next step, If an abstract idea is present in the claim, determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. Examples of limitations that may be sufficient to qualify as “significantly more” include:
Improvements to another technology or technical fields;
Improvements to the functioning of the computer itself;
Meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment.
Examples of limitations that are not enough to qualify as “significantly more” include:
Adding the words “apply it” (or an equivalent) with an abstract idea, or mere instructions to implement an abstract idea on a computer;
Requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry.
The question of where the line of an abstract idea is drawn is still not clearly defined. I’ll wait for the updated USPTO guidelines, Patent Trial and Appeal Board (PTAB), and court decisions to provide additional clarity.
3D printing is an exciting field of technology and has made some great advances recently. It is a disruptive technology with the capability to transform the manufacturing industry. Relatively inexpensive hardware and openly available design files allow individuals and companies to manufacture “complex” components at any location. The nature of 3D printing technology will test the bounds of liability existing patent, trademark, and copyright regimes. The maturing technology has changed and will continue to change what can be printed. More specifically, it has made strides toward becoming a common household appliance. Companies now offer 3-D printers for just over $1,000, and prices are dropping rapidly. One recent study on the cost effectiveness of 3D printing at a household level.
What is often overlooked is that beyond just liability issues raised by the new technologies, the new technologies will impact the enforcement and valuation of the intellectual property. There will be issue in how the laws and courts evolve to address 3D printing and its legal impact. In making a decision to proceed with a patent application, the impact of possible liability changes AND the impact to valuation and enforcement of patent or other intellectual property rights of potentially 3D printable matter.
I have heard questions about 3D printing in relation to companies’ intellectual property, as these decisions must be made now in the infancy of 3d printing). I have also heard cries that 3D printing will be the fall of enforceable intellectual property rights. I believe that those cries are premature.
What is the infringement model and who is the primary infringer? Perhaps, the music industry holds some more predictive lessons. At one time, the dominant music pirate infringement model was the small scale manufacture, pressing CDs and street corner vendors selling the counterfeit CDs. The target for criminal action and lawsuit was that large scale pirate or the corner vendor. Then digital music and peer to peer sharing became a widespread model of infringement.
When one thinks of infringement in a product context, one typically thinks of the manufacturing line. One would focus on that manufacturer in order to abate infringement. However, 3D printing holds the possibility of changing that. If potential infringement shifts to small scale infringers, the ability and practicality to enforce against individuals lessens.
There is varying schools of thought as to how valuation might be impacted. One school predicts a negative impact. They reason that consumers will be able to scan and print any object thus the value of a product patent is negligible. Websites like Thingiverse will freely distribute designs and it would be impractical to enforce infringement for a single item. Other schools of thought predict overall neutral or positive impact. They reason that there are already patents for digital rights management for 3D printing technology. They also point to third party 3D printer policies restricting printing where it would infringe other’s intellectual property. Other arguments favoring neutral or positive impact may be drawn from the current music distribution model. Similar advantages that digital music facilitated for independent music may occur for some products. 3D printing may lower the threshold sales volume such that products that were not previously commercially viable can enter the market. Some potential patents with limited market prospects might meet a lowered minimum threshold market potential.
Some factors to evaluate how 3D printing might affect patent valuation and enforcement include:
Can the product currently be produced with a 3D printer?
If so, is the printing cost in the range of the purchase cost?
If so, is the printed product of similar quality?
Is the product likely to be capable of reproduction with a 3D printer?
Is the product a low price product?
What is the projected sales volume?
Of course, one doesn’t haven’t have a crystal ball to predict the impact of 3D printing on patent valuation and enforcement but the impact should not be ignored.
The final provisions of the America Invents Act (AIA) recently took effect. The AIA represents the most significant overhaul of United States patent law since the mid twentieth century. It enacted provisions over time, with some provisions taking effect in September, 2011, some in September, 2012, and the final phase taking effect in March, 2013. Even though the provisions are effective, there still remain questions about the scope of impact. The United States Patent & Trademark Office (USPTO) has sought comment and issued rules based on the new provisions. The new Patent Trials and Appeal Board (PTAB) has been formed. The courts have made some rulings based on the new provisions. Without a doubt, prudent innovators have been and are continuing to update their patent strategy based on the new laws. Below are three such steps for consideration:
1. File Patent Applications Early and Supplement with Later Applications
After March 16, 2013, the United States became a first to file country. As a result, the filing date, not the actual date of invention, is the key date in determining what can be cited as prior art. Previously, a patent applicant could rely on the earlier actual invention date to removed the cited art. As a result, a company should consider filing a patent application as early as possible. Under prior patent filing strategy, a company might have waited until the technology and all of its features had been completed before filing. Under the new patent laws, the patent strategy might include filing a patent application as soon as the core technology is completed and subsequent patent applications as the improvements are developed.
2. Maintain the Invention Documentation Process
As mentioned above, it is true that the United States is now a first to file country. This has lead some to speculate that documentation such as an inventor’s journal (electronic or otherwise), presentation logs, or access lists are unnecessary. This overlooks the fact that a significant amount of patent disputes arise over ownership. These days, employees change companies often and information is spread rapidly. Patent ownership disputes can arise after an employee changes companies or a presentation attendee files a patent application for the subject matter prior to original company (See first point for consideration above). As of March 16, 2013, the USPTO instituted derivation proceedings, where a later patent application filer can demonstrate that an inventor named in an earlier application derived the claimed invention from the petitioner. In order to prevail, the petition must be made supported by substantial evidence. As a result, invention documentation such as inventor journals and access logs should still be considered within best practices.
3. Monitor Patents and Patent Applications in Your Field of Technology
The AIA introduced “inter partes review” and “post grant review” proceeding. The proceedings allow a third party to challenge a granted patent in a proceeding within the USPTO by the PTAB. Each of these proceedings is generally designed to be on shorter timeline and at a lower cost than traditional litigation. The inter partes review is currently available and the post grant proceeding is available (for patents granted under the new first to file rules) to you … and your competitors. As a result, part of the amended patent strategy could include evaluating recently granted patents and whether these proceedings might be useful.
Be aware that the United States patent landscape has changed and so must your patent strategy.
If your company has developed software, it should create a software license prior to distribution of that software. A software license is the key instrument that defines the rights in ownership, usage, and distribution of software between the company and user(s). Developers seek to protect rights in the product developed with their time, money, and staff. Users want to know what is being licensed and whether that license will meet their needs. A software license should be employed in enterprise software, consumer software, “cloud” software, customized software, and even in “open source” software contexts (it is a misnomer that if one desires software to be open source, that the company needs only to forego a software license). Failure to draft a carefully considered software license can lead to loss of ownership of key aspects of the software, loss of control of the business model, bad publicity, and other consequences. There are many options to think about for a software license but three key terms include:
Scope of Use – This element of the software license states the permitted and prohibited uses of the software. A license may, for example, limit the use of the software to the licensee’s own internal use or primary business activity. Such a restriction may support the licensor’s business model or effectively be required by law. For example, in credit card processing software, the software provider may also be providing related services and would seek to limit the uses of the software so that the licensee does not deprive it of revenue opportunities from those third parties. Additionally, the credit card processor may not be able to fulfill IRS reporting obligations if the user processes credit card transactions for third parties.
Intellectual Property – Since you’re reading an intellectual property blog, you probably knew this issue should be addressed. However, this issue should not be overlooked or oversimplified. Innovation in software can invoke multiple areas of intellectual property law and contract law, including patent law, trademark law, copyright law, and trade secret principles. Where software patents exist, notice of the patents should be provided. Copyright almost always exists in software, thus it should be addressed. Furthermore, the intellectual property clauses should not be oversimplified. For example, the intellectual property rights may not be as simple as “Developer owns all right, title, and interest in Software… we own it all, you can’t use it, the end…” Unreasonable restrictions on use of the software may lead to a backlash, lot revenue, or just may not fit the company business model. The intellectual property clauses may be more nuanced due to contemporary business models and social media influence, where the users may make substantial contributions. For example, use of the “Android” name and logo (ie trademarks) by third party developers is advantageous to the Android Market ecosystem. Likewise, the prolific placement of Twitter and LinkedIn logos on third parties websites promotes the use of the Twitter and LinkedIn systems, respectively.
Rights in User Data – Some user data is mission critical. For example, customer relationship management (CRM) can be the lifeblood of a business. Judging by some of the posts on Twitter, other user created data may not be so critical. In light of the software, the business model, and customer profiles, the software license should address the licensor’s and licensee’s rights in user data. This may include user created data, data about the user, or information generated about the user from the user environment. For CRM software on an in-house workstation and servers, where the business model is that the enterprise pays for the software, the license may state that the licensee has complete ownership of the user data and the licensor has no rights in the user data. For a mapping application, the license may state that the mapping company has complete ownership, including the right to redistribute user supplied corrections.
Older language and terms may not apply to the current environment, so a company should periodically review the software licenses. Newer paradigms such as software as a service, virtualization, and multi-core processors have changed the software landscape and thus may lead to ambiguity or undesired results from an existing license.
The above terms are just three terms among many for consideration for inclusion in a software license, so do your research for your specific software and situation.
In the global market, today’s prudent company must evaluate patent protection for its innovative products or services. In doing so, the question arises as to which countries a patent application will be submitted. The general rule of thumb is that a business would evaluate patent protection in countries where the technology is manufactured, marketed, and sold. But that still begs the question, in which countries will those activities occur. Those questions are often not known early in the stage of innovation. Furthermore, the America Invents Act first to file provisions mean that companies will likely file at the earliest possibility in order to have the earliest priority date. In a field of technology, such as chemistry, the innovative compound and synthesis may have occurred in the laboratory, but the profitability of large scale production, precursors for the commercialization, and target markets remain unknown. The costs for filing foreign patent applications can be high. Such costs can include official fees to the foreign country, translation costs which are necessary in most countries, as well as service fees for local agents or patent attorneys. When the innovative technology is in its infant stages, it difficult to know which countries in which to submit a patent application.
The dominant methods for multinational patent filings include the Paris Convention and PCT international patent applications. Under the Paris Convention, the decision as to where to file foreign applications must be made within one year from the date of the original United States filing. Contrast this with the PCT “international” patent application. By filing an international patent application under the PCT, you effectively defer the need for selecting and filing in the target countries by up to 30 or 31 months from the priority date, that is to say the earliest filing date of an earlier filed provisional patent application, earlier filed nonprovisional patent application, or the filing date of the PCT application. By filing an international application you will get an additional 18 months before it is necessary to decide on the specific countries on which to enter.
In order to take advantage of the additional time, the company would evaluate the technology, evaluate possible countries for filing, and prioritize countries for filing. Specific actions might include, evaluating the distinguishing features of the invention, determining the value of the technology to the business, researching competing technologies, assessing market potential and segments within the countries, and gauging patent laws and enforceability of the countries. Those and other actions could easily consume more than twelve months. The additional eighteen month deferral is generally to the company’s benefit. But note that the 30 month period is the latest possible date to file. The applicant need not wait the full 30 months. To illustrate, the full rights of the patent grant do not vest until the patent application is successfully prosecuted through the patent office of the country. Thus it may be desirable to initiate the examination process earlier. In another scenario, the applicant may wish to stagger the time period over which the patent applications (and associated costs) are directed to the selected countries.
In closing, the cost of filing the PCT is actually an additional cost. Eventually, the inventor will still have to pay the national filing fees for the selected countries. However, the option to defer those national filing fees for an additional 18 months can provide the advantage of making a more informed decision in selecting countries.
Patents are granted on a country by country basis. If a company is considering “international” patent protection, that is to say patent applications in multiple countries, there are two primary approaches:
1. Filing patent applications on a country by country basis directly in the patent office of those countries – This can present several concerns. First, it forces the company to select the target countries early, prepare the patent applications, and pay the fees for each selected country early in the process. At this early stage of product development, the company may not yet know which countries are desirable for pursuing patent rights. Furthermore, there are timing issues in filing the patent applications in each country which must be followed to avoid the loss of patent rights. Fortunately, agreements such as the Paris Convention permit a one year timespan for filing of the patent applications within the multinational patent family instead of having to file all of the applications on one day.
2. The Patent Cooperation Treaty (PCT) streamlines and provides more flexibility in the filing and expenses of multiple patent applications compared to direct filings in the national patent offices. Using the PCT procedure, the applicant initially needs only to file a single patent application in the receiving office for which the applicant is eligible. This initial filing accords the applicant a single international filing date and preserves the option to direct this patent application to selected PCT member countries at a later stage. Although more than 125 countries are currently a party to the PCT, the company should confirm that its likely target countries are parties to the PCT. Notable non-member countries in Asia include Taiwan and in South America include Argentina.
After the PCT patent application is filed, the International Search Authority (commonly the United States Patent and Trademark Office, the European Patent Office, or the Korean Patent Office) will perform a search on the PCT patent application for the most relevant prior art and deliver a written report regarding the patentability of the subject invention. This international search report can help the applicant to decide whether it would be worthwhile to seek national protection, and if so, in which countries. Optionally, while still in this international stage, the applicant may amend the application and “demand” a preliminary examination by an International Preliminary Examining Authority (IPEA). This is typically requested when the initial search report is not favorable.
The applicant selects the desired PCT member states before moving into the next stage (“national” or “regional”), where the international application and the search results are transmitted to patent office of the selected countries. Typically within 30 months from the filing date of the international patent application, the applicant continues the patent application process in the desired countries, where the patent application will be examined according to the patent laws and procedures of each of those selected countries. It is at this stage where the cost of preparation and fees multiply based on the number of countries selected, due to translations, revisions, filing fees, and other expenses. During the examination, some patent offices place great weight on the ISA and IPEA search reports (often saving time and money) while others will perform their own search. The applicant then prosecutes the application until the patent is hopefully granted.
Each of the two primary international filing approaches has advantages and disadvantages, especially in light of the business plan. The PCT patent application can preserve the option for filing in many countries for a relatively low upfront cost. It also effectively permits more time to select target countries and more flexibility on the timing of the spending. Additionally, the PCT option can be combined with other agreements such as the patent prosecution highway. This makes the PCT an effective tool in international intellectual property strategy.
Congratulations! You’ve filed your patent application. The next step is for the inventor to commercialize the newly created intellectual property. The three primary options are to completely assign the patent rights to another party, license the patent rights, or to manufacture, market, and sell the product disclosed in the patent application. Frequently, inventors wish to maintain some level of rights in the invention and do not wish to manufacture, market, and sell the product or process described in the patent application. For this reason, inventors often choose to license their technology. While the inventor is creating a list of potential licensees and creating a marketing plan for those potential licensees, he or she should also start thinking about the terms of a patent license. There are many options to think about for a patent license but three key terms include:
1. Payments – The most well known approach for payments are royalties. Royalties are typically agreed upon as a percentage of net sales, but there are also other methods of compensation. For example, the royalty may be a fixed amount for the term of the license, a fixed amount per year, or a fixed amount per unit sold. The royalty rate varies and is influenced by factors such as:
The industry of the product
Whether the technology is a complete self-contained product or an improvement to an existing product
Whether the technology is patent pending or the patent has issued
Current market penetration of the product
The number and nature of competing products
2. Termination – What causes the license to come to an end?
Time – The license may be for a fixed term.
Time Period – For example, as long as the patent is enforceable.
Ongoing Performance Metrics – Minimum annual net sales, minimum annual royalties, minimum unit sales
Milestones – Where the product is a pharmaceutical, the license may be valid for a certain period after FDA approval
3. Geography – The licensor may wish to grant licenses on a country by country basis (or other regional divisions).
4. Field of Use – Field of use licensing permits the technology owner to divide license rights among various market segments. For example, the licensor of a chemical patent may grant an exclusive license to one party for use in the field of human medicine and a second exclusive license to a second party for use in the field of veterinary medicine.
Bonus – Other valuable assets may be licensed in addition to the patent or patent application. Commonly, proprietary information, trade secrets, know-how, or trademarks may be licensed in addition to the patent rights. For example, a patent application may disclose the best manner of making a composition that was known at the time it was filed. Later, the chemists might have determined a more cost-effective method or environmentally friendly of synthesizing the composition. Software patent applications might have related source code. That other valuable proprietary information may be part of the technology transfer.
There are many other terms to consider, but the above terms should be helpful in the early stages of planning for terms in a patent license.
In receiving questions from clients and others, some incorrectly believe that the new first-to-file provisions of the recently passed patent legislation mean that the first party to file a patent application unconditionally has lawful rights in the patent application, even where a second party misappropriates or derives the intellectual party from the first party. This is incorrect.
