Federal Circuit on Tour

The U.S. Court of Appeals for the Federal Circuit will hold oral argument in Silicon Valley in November:

 The Court of Appeals for the Federal Circuit will hold hearings in several locations in Silicon Valley, California during the week of November 3, 2008. Santa Clara University School of Law, Stanford University School of Law and the United States District Courts in San Francisco and San Jose will each host a panel of judges for oral argument during that week.

[Link]

Locks on Microchips Could Deter Hardware Piracy

519722_key_lock.jpgComputer engineers at the University of Michigan and Rice University developed a way to deter hardware piracy. [link] Its a technique they call Ending Piracy of Integrated Circuits (EPIC).

Each chip is protected by the EPIC has a unique lock and key. The chip securely communicates with the chip’s patent holder to obtain a key to unlock itself. The chips only operate after being unlocked.

The EPIC technique uses established cryptography methods and introduces small changes in the chip design process. However, the chips’ performance or power consumption is reportedly not affected.

EPIC is not related to Electronic Privacy Information Center, and not enough information is provided to determine whether this technique raises privacy concerns.

AIPLA Suggests Improvements at the USPTO

I previously reported on the patent prosecution costs disclosed by Alan Kasper’s testimony [PDF] to Congress as the First Vice-President of the American Intellectual Property Law Association (AIPLA). In that testimony, Alan suggested the following improvements at the USPTO:

  • Develop a culture within the USPTO to encourage Examiners to propose claim amendments that would, at least in the examiner’s view, distinguish the claimed invention over the prior art. This would eliminate applicant guessing as to what a Examiner considers allowable and permit the applicant to forgo the cost of filing further amendments, RCEs, continuations, or appeals, by accepting the Examiner’s proposal.
  • Encourage the Examiners to resolve the applicant’s technical formality errors (e.g. an incorrectly designated a claim in an Amendment as, for example, “currently amended”) by informal communication and Examiner’s amendment rather than, for example, issuing a “Notice of Non-Compliant Amendment.”
  • Modify “Pre-Appeal Submission” process to avoid having both the Examiner and the Examiner’s Supervisor—both of whom are presumably against finding any error in the Examiner’s action—on the three member panel that evaluates the reasonableness of the Examiner’s position. At least two senior examiners not involved in prosecution of the application should be on the panel. Having both the Examiner and the Examiner’s Supervisor sets up a 2 to 1 panel position against the applicant at the start.
  • Improve Examiner retention through improvements in the diversity and quality of opportunities for professional development.
  • Increase monitoring of Examiner’s work to ensure quality, by for example, triggering an investigation when an application has more than three Office Actions on the merits.

“End Software Patents” Group Lanches and Sparks Debate

  • The group “End Software Patents” was born recently and asserted that (1) software patent lawsuits result in $11.26 billion in costs; (2) non-software companies are increasingly targeted for software patent infringement suits; and (3) the USPTO and the US Supreme Court [link] do not support software patentability. [Report]
  • Joff Wild of IAM questions the 11.26 billion dollar figure and asserts the underlying data on “total cost” includes both legal costs as well as costs to the business from lost market share, management distraction, etc–not simply litigation costs.
  • Ben Klemens, Executive Director of End Software Patents defends his numbers and responds to Joff here. Joff responds to Ben’s defense here.

Patent Prosection Costs

Peter Zura’s 271 Patent Blog reports on the Congressional testimony [PDF] of the First Vice-President of the American Intellectual Property Law Association (AIPLA) concerning the average cost to prosecute and obtain a patent.

The Average Cost of Preparing a Patent Application:

  • To prepare and file an original application of minimal complexity (10 page specification, 10 claims) by a firm the size of Sughrue Mion, PLLC (an IP boutique with over 100 IP professionals) $8,548.00
  • Mechanical cases (relatively complex) $11,482.00
  • Electrical/computer cases (relatively complex) $13,684
  • Biotechnology/chemical cases (relatively complex) $15,398.00

The Average Cost of Filing an Amendment:

  • Minimal complexity $2,244.00
  • Mechanical case (relatively complex) $3,506.00
  • Electrical/computer case (relatively complex) $3,910.00
  • Biotechnology/chemical case (relatively complex) $4,448.00

The government fees for those filings are $1,030.00 (unless the Applicant is a small entity).

GAO: USPTO Hiring Won’t Reduce Backlog

Wednesday the Government Accountability Office released a report [Summary] [Full Report] that found “it is unlikely that the [Patent Office] will be able to reduce the growing backlog simply through its hiring efforts.” The report provided, “The agency has also estimated that if it were able to hire 2,000 patent examiners per year in fiscal year 2007 and each of the next 5 years, the backlog would continue to increase by about 260,000 applications, to 953,643 at the end of fiscal year 2011.” Therefore the report stated, “Despite its recent increases in hiring, the agency has acknowledged that it cannot hire its way out of the backlog and is now focused on slowing the growth of the backlog instead of reducing it.”

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Software and Information Industry Association Questions State Immunity

siia.jpgThe Software and Information Industry Association (SIIA) filed an amici curiae brief asking U.S. Supreme Court to hear a case where State sovereign immunity for patent infringement is at issue. The issue is whether a State waives its Eleventh Amendment immunity in patent infringement actions by regularly and voluntarily nvoking federal jurisdiction to enforce its own patent rights. The SIIA asserts that it is equitable for States to have immunity from damages for patent infringement while they are free to sue private sector organizations for violations of State held intellectual property rights. The SIIA joined the U.S. Camber of Commerce in filing the brief.

BMPG v. Calf Dept of Health Services, No. 07-956 [Docket Link] [SIIA Brief] [SIIA Press Release].

Intellectual Property Resources

European Patent Attorney Ralph Beier has compiled a massive list of links to intellectual property related websites worldwide. [link]

As of today he lists:

  • Intellectual Property Offices (110)
  • Intellectual Property Organizations (103)
  • IP Database Providers (22)
  • Official Registers and Databases (114)
  • Official Examination Guidelines and Publications (14)
  • IP Classifications Standards (4)
  • Official Gazettes (24)
  • Courts (58)
  • Texts of Legal Regulations (13)
  • Case Law Databases (11)

Ralph’s list is a great resource worthy of a place in any intellectual property attorney’s bookmark list.

IAM on In re Bilski: Tightening The Standards For Software Patents

IAMJoff Wild of IAM Magazine predicts that the Federal Circuit’s en banc rehearing of the In re Bilsk case signals a move to restrict the patentability of software and business methods. He predicts that the Federal Circuits decision will bring the United States closer in line with how Europe treats this subject matter.

He provides the following reasons:

  • Its rare for cases to be heard en banc
  • The Federal Circuit is aware that recently the U.S. Supreme Court has been placing limits on patent holders rights
  • Congress is considering the Patent Reform Act and the Federal Circuit’s Chief Judge is opposed to the changes in the Patent Reform Act

Rule 35 [link, PDF] of the Federal Circuit Rules of Practice provides that an en banc rehearing is ordered by a majority vote of the active circuit judges. It states that en banc rehearing is not favored and ordinarily will not be ordered unless:

  1. en banc consideration is necessary to secure or maintain uniformity of the court’s decisions; or
  2. the proceeding involves a question of exceptional importance.

Here, the court may be answering the Board of Patent Appeals and Interference’s (Board) request for guidance in determining what is patentable subject matter under section 101. The Board stated in its decision [PDF] that “Several major analyses of statutory subject matter [under section 101] have been published recently.” The Board continued, “The USPTO is struggling to identify some way to objectively analyze the statutory subject matter issue instead of just saying ‘We know it when we see it.’ ”

It is possible that the Federal Circuit could provide a framework for determining patentable subject matter under section 101 without restricting the patentability of software and business methods. However, it may also be that the Federal Circuit will provide a section 101 framework that restricts software and business method patents.

Method of Rewarding Waiting Customers

ibmwaitingreward1.jpgA statement in a IBM patent application caught my eye and made me wonder whether the yet-to-be-released-results of the Federal Circuit’s en Banc rehearing of In re Bilski [Patently-O’s coverage] could effect the patentability of the claims in this application. In Bilski the court will consider, among other things, whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101.

The IBM patent application involves a method of reducing waiting-customer dissatisfaction by monitoring a waiting queue, calculating rewards based on the wait, and communicating the reward to the customer. A customer may be waiting on the phone, or at recreational, restaurant or lodging facilities. The IBM application provides, “although the concepts of the present invention are exemplarily discussed above as having been implemented as an automated system on a computer . . . [the] concepts of the present invention could be implemented completely devoid of computerization or automation of any kind.”

However, it is important to focus on what the application claims. Here, claim 1 provides:

A system for reducing customer dissatisfaction for waiting, said system comprising:a queue monitoring subsystem that detects an entry of a customer into a waiting queue;a reward computing subsystem that calculates a reward for the customer for being in the waiting queue; and a communication subsystem to communicate the reward to the customer, wherein at least one of said queue monitoring subsystem, said reward computing subsystem, and said communication subsystem is automated.

The IBM claim requires at least one of the steps to be automated–as for example–embodied in a computer, whereas claim 1 of Bilski does not:

A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of: (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer; (b) identifying market participants for said commodity having a counter-risk position to said consumers; and (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.

Its not clear why Bilski did not add the requirement that a step be automated.