Patent Rejection: Why did the USPTO reject my Patent Application?

After a patent application is filed, the application will be placed in a queue to be examined by a patent examiner at the patent office. The patent examiner’s job is to ensure that only patent applications that meet the legal requirements for patentability are allowed to become patents.

According to some estimates between about 77% to 95% of all patent applications receive at a least one type of rejection or objection during the first examination by a patent examiner. Therefore it is quite common to receive such a rejection or objection in a patent application. Many such objections or rejections can be overcome by a proper response as explained below.

I. Formalities

Before turning to substantive rejections, which consider whether the invention is new as compared to the prior art or whether the subject matter of your invention is patentable, first we will consider objections based on formality requirements.

Parts of A Utility Patent Application

Section 600 of the Manual of Patent Examining Procedure (MPEP) sets out the component requirements for a utility patent application. For the purpose of this article, we will focus on the specification, the drawings, and the claims. The MPEP provides that the specification should include the following sections in order:

  1. Title of the Invention.
  2. Cross-References to Related Applications.
  3. Statement Regarding Federally Sponsored Research or Development.
  4. The names of the parties to a joint research agreement.
  5. Reference to a “Sequence Listing,” a table, or a computer program listing appendix submitted on a compact disc and an incorporation-by-reference of the material on the compact disc (See 37 CFR 1.52(e)(5)). The total number of compact discs including duplicates and the files on each compact disc must be specified.
  6. Background of the Invention.
    1. Field of the Invention.
    2. Description of the related art.
  7. Brief Summary of the Invention.
  8. Brief Description of the Several Views of the Drawings.
  9. Detailed Description of the Invention.
  10. Claim or Claims.
  11. Abstract of the Disclosure.
  12. “Sequence Listing,” if on paper.

Some of the above sections only apply to certain types of applications, but every application generally includes at least a title of the invention, a background of the invention, a brief description of the invention, a brief description of the drawings, a detailed description of the invention, a claim or claims, and an abstract. Therefore if any required section of the specification is not provided the examiner may raise an objection and require that the section be added or that a heading inserted so that all of the sections that are required are in the specification.

However no new subject matter can be added to the application after it is filed. Therefore, if, for example, the abstract is left out of the application at the time it was filed an abstract can probably be written an added based on subject matter disclosed in the rest of the description of the application. Therefore the subject matter of the abstract would not be new as compared to what was originally disclosed.

Features claimed but not shown in the drawings

In many cases in order for a feature to be claimed in a patent application it must be shown in the drawings. This is not always true for her example with respect to inventions that don’t require any drawings, such as certain chemical inventions. However, many if not most patent applications include one or more drawings that accompanied the description to help the reader understand the invention. See MPEP 608.02. If the invention is of the type that is capable of being shown in drawings then any claimed feature should also shown in the drawings.


A detailed discussion of how drawings should be drafted in order to comply with patent offices requirements is outside the scope of this article. However the rules at 37 CFR 1.84 set forth the standards for patent drawings. Further the USPTO created a Guide for Preparation of Patent Drawings dated June 2002 which is a good resource for resolving questions regarding patent drawings.


Every non-provisional application must include at least one claim. If the patent application does not have a claim the USPTO will not provide the applicant with a filing date. Claims are the most difficult and important portions of a patent application to draft properly. One of the most common objections raised with respect to claims is that a feature or element described in the claim lacks an antecedent basis, which is explained in MPEP section 2173.05(e).

A claim lacks an antecedent basis, for example, when a claim refers to ‘the lever’ or “said lever, where the claim contains no earlier recitation or limitation of a lever. Every element in a claim must be introduced starting with an “a”, such as “a lever”  and every reference to that lever thereafter is either in the form of “the lever”  or “said that lever.” Therefore you can’t recite “the lever” before you provide “a lever” earlier in the claim. if the claim does recite “the lever” before any reference in the claim is made to “a lever” the examiner may reject the claim on the basis that “the lever” lacks an antecedent basis of the claim. This is just one of the formalities that are required when drafting claims. Antecedent basis issues can almost always be remedied by an amendment to the claims that introduces the element in question with an “a” or “an”.

Above are just some of the formality issues that might cause the examiner to issue an objection of your application.

II. Substantive Rejections

Many of the above mentioned formality objections can be easily overcome as long as the application was drafted properly in the first case.  However dealing with substantive rejections can often be more challenging. A substantive rejection often includes an assertion by the examiner that the invention as described in the claims is not new as compared to the prior art.

There are a number of ways to overcome a rejection based on the prior art. These include amending the claims to include further limitations so that the claim language doesn’t overlap the prior art, making arguments that the examiner’s interpretation or understanding of the prior art is not correct, making arguments that the examiner has improperly combined two or more prior art references that cannot be combined under the circumstances. Other methods to overcome the office action which are less common can include proving, if the application was filed before the America Invents Act deadline, that you invented your invention before the reference date of the prior art and diligently pursued a prototype for filing a patent application.

Rejections based on novelty, i.e. that the claimed invention is not new in relation to the prior art, usually take one of two forms: a 35 USC 102 anticipation rejection, a 35 USC 103 obviousness rejection, or a 35 USC 101 ineligible subjectmatter rejection.

Section 102 Anticipation Rejection

In a section 102 anticipation rejection the examiner has to show that each and every element of the subjects claimed is found in one reference either explicitly or implicitly. So to overcome a 102 rejection the task is either to add additional limitations to your claim or to argue that the reference does not contain each and every element of your claim.

Section 103 Obviousness Rejection

In a section 103 obvious this rejection, the examiner could not find every element of your claim and one single reference instead the examiner uses two or more references combined to find every element of your invention. The examiner must put forth a basis as to why it would have been obvious to one skilled in the art related to your invention to have combined the references to meet all of the elements of claim. To overcome a 103 rejection limitations several approaches can be taken, including elements can be added to the claim which are not found in any of the references cited, arguments can be made that the references cannot be combined, an argument can be made that the references do not show all the elements as the examiner claims.

Section 101 Ineligible Subject Matter Rejection

in a section 101 rejection the examiner is asserting that one or more claims of the application are not directed to subject matter that can be patented. This often arises in cases involving computer based, biotech, and business method inventions. The scope of the types of inventions that can be protected is very broad under the U.S. Patent law. But there are some exceptions such as mathematical formulas, abstract ideas, and laws of nature. However it is possible to patent the application of a mathematical formula or abstract idea but not the mathematical formula or idea itself. If the patent application was drafted properly at the beginning it is often possible to overcome this rejection by incorporating appropriate elements into the claims or working with the wording of the claims to avoid claiming directly abstract ideas, mathematical formulas, or laws of nature.


While the above objections are not an exhaustive list, but comprise some of the common issues that arise during substantive examination of patent applications. Many of them can be overcome by the appropriate argument or amendment in a response depending in some cases one how the patent application was originally. A properly drafted application seeks to anticipate and provide support for any changes that might need to be made later during examination by the Patent Office.

Method of Monetizing Copyrighted Content on the Internet Again Found Patent-eligible

Ultramercial v. Hulu and Wildtangent, Dkt No. 2010-1544 (Fed Cir. June 21, 2013)Fig1_USPAT7346545.

Ultramercial sued Hulu, YouTube, and Wildtangent Inc. alleging each infringed U.S. Patent 7,346,545. Hulu and YouTube were dismissed from the case. The trial court granted WildTangent’s motion to dismiss WildTangent from the case on the basis that the ’545 patent did not claim patent-eligible subject matter.

In the first round at the Federal Circuit, the court reversed finding the claimed method of monetizing copyrighted content on the Internet was a patent-eligible process. Then WildTangent appealed to U.S. Supreme Court and the Court vacated the Federal Circuit’s decision discussed below and remanded the case to the Federal Circuit to consider in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U. S. ___ (2012). On remand from the Supreme Court, the Federal Circuit again found that the claimed method of monetizing copyrighted content on the Internet was a patent-eligible process.

The method steps of claim 1 of the ‘545 patent are recited in my original post on this case.

Chief Judge Rader, J. O’Malley and J. Lourie comprised the panel in this case. All agreed that the ‘545 patent recited patent eligible subject matter. But J. Lourie wrote a concurring opinion suggesting that the analysis in this case should track that provided in the plurality opinion that he joined in CLS Bank International v. Alice Corp., __ F.3d __,  (Fed. Cir. May 10, 2013) (Lourie, Dyk, Prost, Reyna, & Wallach, JJ.,plurality opinion). It is quite surprising to suggest that the reasoning of a plurality opinion should be followed as binding precedent. C.J. Rader and J. O’Malley were supportive of a broad view of patent eligible subject matter in the CLS Bank case, whereas J. Lourie took a more narrow view–which is reflected in the opinions in this case.

Meaningful Limitations. The majority noted that assessing whether a claim was impermissably directed to an abstract idea involves a two step inquiry. The first is whether the claim involves an intangible abstract idea. And second, if so, then whether “meaningful limitations in the claim make it clear that the claim is not to the abstract idea itself, but to a non-routine and specific application of that idea.” When meaningful limitations narrow the scope of the claim so that the claims do not preempt all uses of the abstract concept, then the claim is less likely to be considered impermissably claiming an abstract idea. This is true because the application of an abstract idea can be patent eligible.

The majority noted that “with a claim tied to a computer in a specific way, such that the computer plays a meaningful role in
the performance of the claimed invention, it is as a matter of fact not likely to preempt virtually all uses of an underlying abstract idea, leaving the invention patent eligible.” It also noted that inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they are not patent eligible. The court also noted that “unlike the Copyright Act which divides ideas from expression, the Patent Act covers and protects new and useful technical advance, including applied ideas.”

Wrenching the Meaning of Abstract. After reciting the 10 claims limitations from claim 8 of the ‘545 patent, the court concluded that “it wrenches meaning from the word [abstract] to label the claimed invention abstract.” The claim did not “cover the use of advertising as currency disassociated with any specific application of that activity.” The district court erred in stripping away the limitations and focusing on the asserted core of the invention. One of the claim steps included “providing said media product for sale on an Internet website” required a computer and the internet.

No Preemption of all Advertising. The court noted that the claims at issue here presented no risk of preempting all forms of advertising, let alone advertising on the internet.  Further the claims were not directed to purely mental steps because, in part, the claims require a controlled interaction with a customer over the Internet website.

Overly Detailed Claims Not Required. The court noted that the claims did not specify any particular mechanism–such as FTP, email, streaming–for delivering media content to the customer. Yet the court found this did not render the claimed subject matter impermissibly abstract.

Comment. Judges from both sides of the CLS Bank case agreed that the claims in this case were not impermissibly abstract. This is the correct result. When a computer and the internet are integral components to the claimed process, the process does not preempt all uses of the underlying idea, and the process cannot be performed mentally or on paper, the claim is generally not abstract.

Here it appears that the subject matter–serving advertisements over the internet–is an inherently technology based invention. In other words, it is not something that could be carried out in one’s mind or on paper. In contrast, the claim steps in CLS Bank were capable of being performed on paper, if not directly as mental steps. Therefore, claims directed to processes that are carried out with a computer, but could also be performed in ones mind or on paper, will have a harder time overcoming the abstractness challenges with the five member plurality in CLS Bank.

This case shows that inherently technology based inventions still have a reasonable chance of being claimed in a way that will be found patent eligible with members of the Federal Circuit that are more hostile to software patents. Nonetheless the outcome of patent eligibility challenges related to software based patents are still quite uncertain and dependent on the panel of judges that are assigned to a given case at the Federal Circuit.





Employer and Employee Invention Rights: Does My Employer Have Rights in My Invention?

Whether an employer has rights in an employee’s invention depends on the circumstances of the invention, the terms of any agreements between the employee and employer, and the state’s laws that cover the situation.

The first step is to review the terms of any agreements that the employee signed with the employer. This is because it is possible for an employee to transfer his or her rights in an invention to the employer through a written agreement. Titles to agreements that might contain relevant terms regarding invention ownership include “employment agreement”, “non-compete agreement” “non-disclosure agreement” “intellectual property agreement” “invention agreement” “employee invention agreement” etc. Not all documents with such titles necessarily contain provisions regarding invention ownership, however such documents, if they exist, should be reviewed in case they contain such provisions.

Regardless of the title of the agreement, we are looking for terms that transfer rights in invention to the employer in consideration for the employee employment compensation. Terms regarding invention ownership may explain the scope and extent to which the employer claims ownership over the employee’s inventions.

The terms of an agreement might provide that the employer owns inventions developed by the employee, even if the employee does it on his or her own time and with his or her own resources. However, typically ownership claims are limited to inventions that are related to the employer’s business or reasonably anticipated future business.

Some states have statutes that limit the types of inventions an employer can claim ownership in. For example, Illinois has an Employee Patent Act that prohibits an employer from claiming rights in an invention in which no equipment, supplies, facilities, or trade secret information of the employer was used and which was developed entirely on the employee’s own time, unless (a) the invention relates (i) to the business of the employer, or (ii) to the employer’s actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by the employee for the employer. Therefore Illinois prohibits employers from claiming rights in inventions not developed with employer resources and unrelated to the employers business. However, not all states have such a statute. So if Illinois law does not apply to the employment agreement at issue, statutes of the applicable state law will need to be reviewed.

No Agreement
If there is no written agreement providing the employer owns certain inventions of the employee, then the result will depend on the circumstances of the employment and invention. If any employee was hired or directed to solve a particular problem or to exercise his or her inventive faculties, then it is likely the employer will own the resulting invention under an implied-in-fact assignment. However if the hiring or direction is not sufficiently specific and the employee was not hired or directed to make improvements in a designated area, the employer may not own the resulting invention. There is a fine line between hire-to-invent and general employment, which is very circumstance dependent.

Shop rights
In the instance where the employer does not own the invention, but where the employee uses the employer’s resources to conceive, develop, or to reduce an invention to practice, the employee may have “shop rights” in the invention. Shop rights provide the employer with a nonexclusive, royalty-free, nontransferable license to make use of the invention.

It is important for employers to have written agreement that define which employee inventions that the employer will own. To determine whether an employer will own a particular invention, the applicable employment agreements, the circumstances of invention, and the applicable law should be reviewed.

CLS Bank v. Alice on Software Patentability: Can System Claims With Integral Tangible Components be Abstract?

CLS Bank v. Alice Corp., Dkt. No. 2011-1301 (Fed. Cir. May 10, 2013) (en banc).

Previously I noted that the USPTO told its Patent Examining Corps that the Federal Circuit’s decision in CLS Bank v. Alice, Dkt. No. 2011-1301 (Fed. Cir. May 10, 2013) resulted in “no change in examination procedure for evaluating subject matter eligibility.” In this post I will summarize the various opinions in CLS Bank.

The district court held that certain claims of Alice’s U.S. Patents 5,970,479 (the “’479 patent”), 6,912,510 (the “’510 patent”), 7,149,720 (the “’720 patent”), and 7,725,375 (the “’375 patent”) are invalid under 35 U.S.C. § 101 as being directed to patent in-eligible subject matter.

Result without Agreement on Reasons. On May 10, 2013 the Federal Circuit issued its en banc opinion in CLS Bank v. Alice, Dkt. No. 201. The court’s main per curiam opinion provided, in total:

Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.


The court was sharply divided across six separate concurring and dissenting opinions. A majority of the judges could not agree on the reason for the result. Therefore as noted by Judge Newman, the en banc review was hoped to provide certainty regarding the bounds of patentable subject matter by providing an objective standard, but this failed as a majority of the court could not agree on such a standard. As Newman stated regarding the CLS Bank opinion. “…we have propounded at least three incompatible standards, devoid of consensus, serving simply to add to the unreliability and cost of the system of patents as an inventive for innovation.” Newman Op. at 1-2. Therefore the result of future appeals in the area of software subject matter will depend on the random selection of the panel of judges hearing the particular appeal, unless the case is resolved by the Supreme Court or by a later en banc case at the Federal Circuit.

Summary By Opinion

  • Judges Lourie, Prost, Reyna, and Wallach. Judge Lourie would have invalidated Alice’s methods, computer-readable media, and systems claims as claiming patent ineligible subject matter.
  • Chief Judge Rader and Moore would invalidate Alice’s methods and computer-readable media claims, but upheld the system claims.
  • Judges Linn and O’Malley would have upheld all the claims as patent eligible.
  • Judge Newman would have upheld all the claims as patent eligible.

Summary by Claim Type

  • Method Claims:
    • Valid: Linn, O’Malley, and Newman
    • Invalid: Lourie, Dyk, Prost, Reyna, Wallach, Rader, and Moore
  • Computer-Readable Media Claims
    • Valid: Linn, O’Malley, and Newman
    • Invalid: Lourie, Dyk, Prost, Reyna, Wallach, Rader, and Moore
  • System Claims
    • Valid: Rader, Moore, Linn, O’Malley, and Newman
    • Invalid: Lourie, Dyk, Prost, Reyna, and Wallach

J. Lourie: All  Claims Not Patent-Eligible

Method claims. Claim 33 of the ‘479 patent was a representative method claim:

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 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 ones 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.

J. Lourie, joined by J. Prost, Reyna, and Wallach,  found this claim describes the concept of reducing settlement risk by facilitating a trade through a third party, which is an abstract idea. Then the issue was whether the claim adds “significantly more” to the abstract idea. J. Lourie found that none of the limitations in the claim added anything of substance to the claim beyond the abstract idea.

J. Lourie found that the computer limitation (the parties agreed that claim 33 required a computer) was nothing more than an “insignficant post solution activity.” J. Lourie stated that “At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could.”  J. Lourie continued, “Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent ability.”

Computer-Readable Medium Claims. Claim 39 is a representative computer-readable medium claim, partly reproduced below:

39. A computer program product comprising a computer readable storage medium having computer readable program code embodied in the medium for use by a party to exchange an obligation between a first party and a second party, the computer program product comprising:

program code for causing a computer to send a transaction from said first party relating to an exchange obligation arising from a currency exchange transaction between said first party and said second party; and

program code for causing a computer to allow viewing of information relating to processing, by a supervisory institution…

By looking passed “drafting formalities” J. Lourie found that claim 39 was not truly drawn to a specific computer readable medium, rather than the underling method of reducing settlement risk using a third party intermediary. Therefore, J. Lourie would find the medium claims ineligible.

System Claims. Claim 1 of the ‘720 patent is a representative of the contested system claims, partly reproduced below:

1. A data processing system to enable the exchange of an obligation between parties, the system comprising:

a data storage unit having stored therein information about a shadow credit record and shadow debit record for a party, independent from a credit record and debit record maintained by an exchange institution; and

a computer, coupled to said data storage unit, that is configured to (a) receive a transaction; (b) electronically adjust said shadow credit record and/or said shadow debit records…

J. Lourie asserted that the computer-based limitations recited in the system claims cannot support any meaningful distinction from the computer-based limitations that failed to supply an “inventive concept” to the related method claims. J. Lourie asserted that the system claims recited a handful of computer components in generic, functional terms that would encompass any device capable of performing the same ubiquitous calculations, storage, and connectivity functions required by the method claims.

J. Lourie stated that “No question should have arisen concerning the eligibility of claim to basic computer hardware under 101 when such devices were first invented.” The judge further stated, “But we are living and judging now . . . and have before us not the patent eligibility of specific types of computer or computer components, but computers that have routinely been adapted by software consisting of abstract ideas, and claimed as such, to do all sorts of tasks that formerly were performed by humans.”  Further the judge stated, “Abstract methods do not become patent-eligible machines by being clothed in computer language.”

Rader Opinion: System Claims Not Abstract

The opinion by C.J. Rader, J. Linn, Moore, O’Malley (the “Rader Opinion”), noted that “any claim can be stripped down, simplified, generalized, or paragraphed to remove all of its concrete limitations, until at its core, something that could be characterized as an abstract is revealed.” “Such an approach would ‘if carried to its extreme, make all inventions unpatentable because all inventions can be reduced to underlying principles of nature  which, once known, make their implementations obvious. ” Further, “A court cannot go hunting for abstractions by ignoring the concrete, palpable, tangible limitations of the invention the patentee actually claims.”

The Rader Opinion concluded that “where the claim is tied to a computer in such a way that the computer plays a meaningful role in the performance of the claimed invention, and the claim does not preempt virtually all uses of the underlying abstract idea, the claim is patent eligible.” The Rader Opinion found the system claims patent eligible noting that there were four separate structural components in the system claims: a computer, a first party device, a data storage unit, and a communications controller. The specification provided tat the core of the system hardware is a collection of data processing units” so that the structural and functional limitations were not mere conventional post-solution activities. The Rader Opinion concluded that labeling the claimed system an abstract concept “wrenches all meaning from those words, and turns a narrow exception into one which may swallow the expansive rule.

The Part VI of Rader Opinion joined by only J. Moore, found that the method and medium claims were not patent eligible.

J. Moore: The Death of Technology Patents Under J. Lourie’s View

J. Lourie’s view has broad negative implications for protecting software and technological inventions. As noted in Judge Moore’s opinion,  “If all of these claims, including the system claims are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents.” Moore noted that if all the claims at issue in CLS Bank were invalid then “so too are the 320,799 patents which were granted from 1998-2011 in the technology area ‘Electrical Computers, Digital Processing Systems, Information Security, Error/Fault Handling.'” In J. Moore’s view “if the reasoning of Judge Lourie’s opinion were adopted it would decimate the electronics and software industries.” Moore Op. at 2, note 1.

J. Moore noted that in In re Alappat, 33 F. 3d 1526, the court held patent-eligible a claim that would read on a general purpose computer programmed to carry out the operations recited in the claims. On page 8 and 9 of the slip opinion, J. Moore correctly noted that the distinction between hardware and software is not helpful as programs written in software could also be hard-programed in hardware. J. Moore stated software effectively “rewires a computer, making it a special purpose device capable of performing operations it was not previously able to perform.”

J.Moore noted that if the system claims in this case did not clear the 101 hurdle, “then the abstract idea exception will be insurmountable bar for innovators of software financial systems and business methods, as well as for those in the telecommunications field.” J. Moore stated:

“Every software patent makes a computer perform different functions–that is the purpose of software. Each Software program creates a special purpose machine, a machine which did not previously exists (assuming the software is novel). The machine ceases to be a general purpose computer when it is running the software. It does not, however, by virtue of the software it is running, become an abstract idea.”

J.Moore provided that the heavy lifting for considering the inventiveness of such systems claims directed at a computer running specific software is not abstractness under section 101 but rather is the novelty (newness) requirement of section 102 and the non-obviousness requirement of section 103. Section 102 and 103 can handle knocking out patents directed to inventions that merely take a known or abstract idea and put it on a computer.

 J. Linn’s Opinion: All Claims Patent Eligible under the District Court’s Construction

J. Linn and O’Malley (the Linn opinion) would have found all the method, medium, and system claims patent eligible. The J. Linn opinion noted that because of the procedural stage of the case, the parties and the trial court agreed that the claims should be construed in Alice’s favor and that the method and medium claims required a computer. Therefore the Linn Opinion would have found all the claims as construed by the district court to be patent eligible.

Further the Linn Opinion acknowledged the concerns expressed by Amici Curiae: Google, Dell, Facebook, Intuit, Rackspace, Red Hat, Zynga and Internet retailers regarding the proliferation and aggressive enforcement of low quality software patents.  However, J. Linn noted that Congress could make changes in the law, but broadening what is a narrow exception to the statutory definition of patent eligible should not be the vehicle to address the concerns through the courts.

J. Newman: Section 101 is a Course Filter – All Claims Patent Eligible

J. Newman would have found all claims patent eligible. Newman’s opinion set forth three principles: (1) section 101 is an inclusive statement of patent-eligible subject matter, (2) the form of the claim does not determine section 101 eligibility, and (3) experimental use of patented information is not barred.  Newman stated that there is no need for an all purpose definition of “abstractness” or “preemption” as was “heroically” attempted in the various opinions. Newman wants a very broad section 101 interpretation that would let the other provisions of the patent act do the work in determining patentability such as novelty, utility, prior art, obviousness, description enablement.


C.J. Rader, J. Linn, and J. Moore’s views are the best approach to section 101 patent eligible subject matter regarding system claims. When a claim includes computer or electronic elements that are more than mere post solution activities, those are specific tangible items that cannot reasonably be said to be “abstract.” As for J. Lourie’s opinion providing the view to get to the  gist of the claim, that is a slippery slope and there is no principled way to distinguish when to ignore tangible components of a claim to get to the gist of the underlying claim and when those tangible components should not be ignored.  Every claim term should be considered.

Further, J. Linn is correct that the concerns regarding low quality patents are not best remedied a broad judicially created “abstractness” exception that interprets system claims with integral tangible components as abstract. The issues regarding technology patents should be handled by Congress or through other patent requirements regarding novelty (102) and non-obviousness (103).  As noted in several opinions, every claim can be reduced to an abstract concept by stripping away the details and components. However, if such an approach is taken, the exception could expand to swallow the patentability of all inventions.

 Practice Tip

In view of this decision, patent applications directed to software or were the invention utilizes software should include at least one set of system claims because, of all the claim types of Alice patents, the system claims garnered the most support from judges regarding patent eligibility.


USPTO: No Change to Software Patent Eligibility Examination After CLS Bank

In a memo dated May 13, 2013, the USPTO told its Patent Examining Corps that the Federal Circuit’s decision in CLS Bank v. Alice, Dkt. No. 2011-1301 (Fed. Cir. May 10, 2013) resulted in “no change in examination procedure for evaluating subject matter eligibility.”

On May 10, 2013 the Federal Circuit issued its en banc opinion in CLS Bank v. Alice, Dkt. No. 201. The court’s main per curiam opinion provided, in total:

Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.

The court was sharply divided across six separate opinions.

The USPTO memo provided that several important themes emerged from the various separate opinions:

  •  There was agreement that the test for eligibility is not a rigid, bright line test and must be made by evaluating a claim as a whole, on a case-by-case basis, using a flexible approach.
  • Many of the judges explicitly noted that the test for eligibility is a separate and distinct inquiry from other patentability concerns, particularly novelty and obviousness.
  • It was generally agreed that when evaluating the claim as a whole the claim must be analyzed to determine whether the additional limitations add significantly more, or in other words add meaningful limits, to the abstract idea or law of nature.

The memo concludes by stating that the USPTO will continue to study the decision in CLS Bank and will consider whether further detailed guidance is needed on patent subject matter eligibility under 35 USC 101.

Software patents claims through system claims should still be patentable under the CLS Bank decision because the court was equally divided. An equally divided court provides no majority position with respect to the system claims at issue.



Options When Your Invention Is Stolen

If you disclosed your invention to someone and that person subsequently copied your invention and or filed a patent application on the invention, you may have options to take action depending on the circumstances. Several scenarios are explained below.

By an non-inventor employee
If your employee, who is not an inventor, is commercializing or has sought patent protection, you will want to review the documents that were executed when the employee was hired. Such documents could include non-disclosure or non-compete provisions.

The misappropriation of the invention could constitute a breach of the non-disclosure provisions and or could constitute trade secret misappropriation if the product/service at issue was not publicly available, or if publically available, if the employee had access and utilized non-public information about the products/services. The misappropriation could also violate a non-compete provision depending on its terms. Further, the misappropriation could violate the employee’s duty of loyalty to his/her employer.

By an inventor employee
Many of the claims explained above regarding the non-inventor employee may exist against a inventor employee depending on whether the employer has any rights in the invention.

To determine whether the employer has any rights in an invention, first any signed agreements between the employee and employer should be reviewed. Language pertaining to employee ownership of employee’s inventions should be reviewed if such language exists.

If no signed agreements exist a number of factors may be considered to determine whether the employer has any rights in the invention such as: (1) was the employee employed to invent, (2) did the employee work on the invention at the direction of the employer, (3) did the employee work on the invention during work hours, (4) did the employee work on the invention using employer equipment, and (5) was the invention related to the employee’s business or reasonably anticipated business or research?

Further state statutes might exist that impact what rights an employer can claim in an invention. For example, Illinois has a statute that limits an employer’s ability to own inventions made by the employee on his or her own time without any of the employer’s equipment, supplies, or facilities when the invention is not related to the employer’s business or the employer’s actual or demonstrably anticipated research or development.

By a non-employee co-inventor
If there are two or more non-employee inventors, under patent law, each inventor will own the patent jointly with the other inventors. This allows each inventor to make, market, sell, license, or otherwise grant rights in the patent and receive moneys therefrom without splitting the funds with the other inventors. Further, each inventor does not need to get permission from the other inventors to undertake such activities with respect to the patent.

Therefore it is important to account for the possibility that co-inventors might fall into a dispute about the patent, a patent application, or the commercialization of a patent pending product/service. Whenever there is more than one inventor it is best to form a legal entity in which the inventors own an interest (e.g. own shares). The ownership of the invention can be transferred to the legal entity by all inventors. The internal operating documents of the entity can describe (1) the ownership interest of each inventor (and other non-inventors, if desired), (2) how the invention will be commercially exploited, (3) how disputes are resolved between inventors, (4) what happens if one or more inventors wants to proceed but other inventors do not, and (5) many other business considerations. The legal entity formed can be a written partnership, a corporation, an LLC, or other entity.

If the rights in the invention were assigned to an entity, then action may be taken based on the rights held by the entity.

By a someone under an NDA
Prior to marketing or publicizing an invention, it is often necessary for an inventor or company to work with others to develop the product or to take other necessary marketing and business actions for launching the product. Often a nondisclosure agreement (NDA) is used between the inventor/company and the third parties prior to product/service launch.

If the invention was misappropriated by a person or entity to which the invention was disclosed under a NDA, then the NDA should be consulted for determination of rights you may have.

Some possible basis for taking action are explain above depending on the circumstances. If your invention has been misappropriated, you likely have options for taking action and recovering rights in the invention. If there is a basis for taking action, the first set may be to send a letter to the misappropriator. However, in some circumstances the first step will be be to file a lawsuit or take action at the USPTO. Seek advice of an attorney regarding the options you may have under your particular circumstances.

Ensuring Strong Patent Enforcement Position Through Virtual Patent Marking

U.S. patent law encourages patent owners to mark products or services that are covered by at least one claim of a patent. Therefore patent marking is an important step in ensuring a strong patent enforcement position if infringement occurs. The America Invents Act now allows “virtual patent marking” as explained below.

Reason for Marking
Section 287 of Chapter 35 of the U.S. Code provides that if a patent owner fails to mark its patented invention, then the damages will be limited to those arising after the infringer was notified of the infringement. However, if the invention is marked, then the patent owner will be able to get damages back to the start of the infringement (subject to any applicable statute of limitations).

Therefore, lets see what happens if the invention is not marked. Assume that an infringer starts infringing your patent five years ago, but you only discovered the infringement today and thereafter quickly sent the infringer a demand letter notifying the infringer of the infringement. Lets assume that the sales over the last 5 years resulted in 3 million dollars in recoverable patent infringement damages. Since the invention was not marked, the patent owner would only be able to recover damages arising after the infringer received the infringement demand letter, and not the 3 million dollars accruing over the last 5 years.

Therefore, marking has an impact on the damages that are recoverable for infringement. Also, whether the invention was marked impacts how a infringer might react to a claim of infringement. If the infringer has a liability of 3 million dollars in damages the infringer is obviously in an inferior bargaining position in terms of settlement as compared to if the infringer as no monetary liability because the invention was not marked.

Who Should Mark
Those that are making, offering for sale, or selling within the United States any patented article or importing any patented article into the United States should mark. Therefore if you are not commercializing your invention by the above activities, you are not subject to the damages limitations of section 287.

How to Mark
Marking notice may be given either by (1) fixing on the product the word “patent” or the abbreviation “pat.”, together with the number of the patent, or (2) by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent.

If from the character of the patent article, the product itself cannot be marked, then it is permissible to fix the above notice on a label attached to the product or to the package of the product.

Virtual Marking
As provided above, you can provide notice by listing a internet address together with the word patent or pat. where the resulting internet webpage provides an association between each patented article and the corresponding number of the patent. In this way you can quickly and easily update the marking of products with newly issued patents by updating the patent marking webpage to show the patents that apply to the corresponding product. This alleviates the need to change molds or packaging as new patents are issued.

Routinely Updated. The webpage should be updated whenever a patent status changes, including when a patent issues and if a court or the USPTO invalidates or narrows the patent in a way that would change whether the corresponding product is covered by the patent.

Availability. The webpage should be continuously available so that anyone trying to determine the patents covering a product/service will be able to have ready access to the webpage. Records of continuous webpage availability should be kept.

Change log. Further it would be best to keep a change log of the changes to the patent marking webpages so that the log shows the details of each change made to the webpage and the date that change was made. This change log is important to show when marking related to a given product/service or patent began on the webpage.

Published Applications. Published patent application and corresponding products may also be listed on the same or a different web page. When listing published patent application on the same page as issues patent, it should be clear that the published application are not issued patents. The benefit of listing published patent applications is that the webpage might provide actual notice that could allow for the recovery of royalties under provisional patent rights statute.

How to Stop A Competitor From Getting a Patent?

When discovering that a competitor has filed a patent application on a product or service you are making or selling or intend on making or selling, the question sometimes arises how can the competitor be stopped from obtaining a patent? This article will review the options to consider in light of a known or suspected pending patent application.

You might become aware of the competitors patent application by finding “patent pending” notice on your competitors products or literature.

Prior Art
In the case that the competitor did not steal your idea, many options involves showing that the competitor’s invention is not new because it was disclosed previously in the prior art. Patents are provided on new inventions not those that are old and known.

In the U.S. prior art inventions include, but are not limited to, those (1) described in previous patents or published patent applications, (2) described in qualifying publications, (3) in public use, or (4) on sale before the effective filing date of the invention. There are certain exceptions which disqualify prior art by another person as prior art if he can show that the disclosure or event was his own work, i. e., the disclosure or event was not independently created by the other person, and the disclosure or event occurred less than one year before a US patent application was filed.

Once your product or service and information about your competitor’s patent application or patent pending product is understood, a prior art search can be performed to determine whether the competitor is likely to obtain a patent and whether the prior art creates safe harbors for you to operate. Generally this starts with searching prior U.S. patents and patent applications. The search can be expanded to include foreign patents and published patent applications. The search can further be expanded to include non-patent publications, such as scientific journals, books, magazines, certain online publications etc.

Further, prior public sales of the subject matter claimed in the application by you or a third party can act as prior art. If you sold the product or performed the service claimed in the competitor’s patent application, you may search your records and produce documents showing a sale of the product/service before the critical date (such as the effective filing date of the pending patent application). Other other prior art may exist depending on the circumstances.

Safe Harbors
By studying prior art, a patent attorney may be able to advise you how to develop or change your product to come within the safe harbor of the prior art. That is, the old inventions disclosed in the prior art, if practiced exactly as disclosed in the prior art, cannot be covered by a new patent. Therefore, such prior art creates a safe harbor for anyone to operate.

Not only can certain prior art provide operating safe harbors, but it can also be used to narrow the scope or prevent your competitor from obtaining a patent in certain circumstances. If the competitor’s patent application is published, then your patent attorney can review the subject matter that your competitor claims in its patent application. If the patent application shows that your competitor is trying to claim subject matter that is within the safe harbor of the prior art, then you have to decide whether to notify the Patent Office or whether to wait.

Take Action
One option you have is to file a submission with the USPTO informing the Examiner of the prior art and arguing that the current claims in the competitor’s application should not be allowed.

The America Invents Act allows third parties (you or your attorney) to submit to the USPTO any prior art patent, published application, or other printed publication that is of potential relevance to the examination of a patent application. This can be done during certain time frames when an application is pending at the patent office. Most notably it is best to pursue this option early as certain deadlines exist after which filing a submission is not allowed.

In the best case, the Patent Examiner will agree with your view that the submission prevents the competitor from obtaining a patent. The second best case, is that the submission persuades the Patent Examiner to narrow the allowable claims in a way so that the resulting claims do not cover your product or service. In this scenario, the competitor may be able to obtain a patent, but their patent would not cover your product or service.

However, there are risks in submitting prior art into a patent application. The first risk is that the examiner will not agree that the submission impacts the claims and will allow a patent to be granted with broad claims that cover your product or service. If this happens, the patent would be strengthened because the examiner considered the submitted prior art but allowed the patent anyway. There is a presumption that a patent is valid. Therefore the prior art could be less useful in attacking the patent later. However, it is possible that in litigation later a court could determine that the USPTO was wrong and the prior art does invalidate some or all of the claims. As between the two scenarios of (1) submitting prior art and the examiner allowing broad claims anyway, and (2) not submitting the prior art and asserting the prior art later, the second scenario is preferred.

As a result of the risks listed above, it may be decided not to make a submission to the USPTO. Instead, you can wait to see if a patent is actually granted. It may be that the Examiner will reject the application without any submission. Also, the patent applicant may decide to drop its patent application at some point if, for example, it is decided that further expense to obtain a patent is not justified from a business perspective.

If a patent does issue, you can have a patent attorney draft you a non-infringement or invalidity opinion, if the circumstances permit, showing how the patent does not cover your product or is invalid or both. This opinion might protect you against enhanced damages in an infringement suit.

You can also attack the patent after it issues by asking the Patent Office to revoke the patent or certain claims of the patent by requesting a re-examination. Also, if the patent owner asserts that you infringe the patent, you can ask a court to declare that you don’t infringe and/or that the patent is invalid.

When you discover a competitor has a patent application pending that might cover one or more of your products or services, you have options for (1) determining whether your product or service is likely to be at risk of infringement and (2) attempting to prevent your competitor from obtaining a patent.

Inventorship: When was the Invention Conceived?

Dawson v. Dawson, Dkt. No. 2012-1214, 1215, 1216, 1217 (Fed. Cir. March 23, 3013).

This case deals with the issue of when an invention is conceived and involves an invention ownership dispute between a university and a pharmaceutical manufacturer. The issue was whether an inventor, Dr. Dawson, conceived of the invention while employed at the University of California, San Francisco (“UCSF”) or instead later when he joined Insite, a pharmaceutical manufacturer. This case deals with medical preparations, but is interesting on the conception point.

While employed at UCSF, Dr. Dawson made a presentation at a meeting of the World Health Organization (“WHO”) Alliance for Elimination of Trachoma. Trachoma is a bacterial infection of the eye that can lead to blindness. Dr. Dawson’s presentation covered the topical use of an antibiotic called azithromycin to control trachoma, which later became the subject of two patents at issue in the appeal. Documents from the WHO regarding the meeting, discussed Dr. Dawson’s presentation but also included a number objections to Dr. Dawson’s approach, such as the concern that that “[n]o product is available” and that the “[e]fficacy and dosing schedule” would need to be determined, and that “problems with ointments for trachoma treatment are well known . . . . Ointments are difficult to apply and poorly tolerated.”

Dr. Dawson left UCSF and began working at Insite with Dr. Bowman on a formulation. Dr. Dawson needed the help of Dr. Bowman because Dr. Dawson did not have experience in preparing ophthalmic medication formations. Dr. Dawson and Dr. Bowman later filed two patent applications as joint inventors. These applications resulted in Patent No. 6,239,113 and U.S. Patent No. 6,569,443. UCSF filed an application to provoke an interference.

Principles of Invention Conception
The court recited several principals of invention conception:

  • Conception is the “‘formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.’” Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir. 1986)
  • After conception “all that remains to be accomplished, in order to perfect the art or instrument, belongs to the department of construction, not creation.” 1 Robinson on Patents 532.
  • “[c]onception is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation,” and that “[a]n idea is definite and permanent when the inventor has a specific, settled idea, a particular solution to the problem at hand, not just a general goal or research plan he hopes to pursue.” Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994).
  • “[b]ecause it is a mental act, courts require corroborating evidence of a contemporaneous disclosure that would enable one skilled in the art to make the invention.” Id.

No Testimony of the Inventors
The court noted that UCSF did not seek testimony from inventor Dr. Dawson or Dr. Bowman on the issue of conception. This is likely because the inventors were not likely to provide favorable testimony to UCSF. However, in this case the reliance on what normally surfaces as corroborating evidence, i.e. contemporaneous disclosure of the alleged conception, was not successful.

General Idea Not Enough in This Case
The court found that the announcement of the general idea in the WHO documents was not sufficient. The court found that the documents provided a preliminary statement about a possibility or potential use and an need for continued work and a report back, fell short of the “definite and permanent idea of the complete and operative invention.”

The Court further found the specific concentrations provided in the patent claims were not disclosed initially in the WHO documents and at the time Dr. Dawson did not know of what concentrations to use.

The dissent found the evidence showed that Dr. Dawson did conceive of the invention while at UCSF. The majority responded that it was reviewing the decision of the Board and not evaluating the evidence in the first instance. Therefore the majority only concluded “that substantial evidence supports the Board’s relevant factual findings and that the Board did not err in holding that UCSF failed to meet its burden of proof as to the legal issue of conception.”

Real Estate Software Patent: User Action Steps Prevent Direct Infringement

US5032989Fig3Move, Inc. v. Real Estate Alliance Ltd., Dkt. No. 2012-1342 (Fed. Cir. March 4, 2013)

Move sought declaratory judgement of non-infringement of two of Real’s patents, U.S. 5,032,989 and U.S. 4,870,576. Real counterclaimed  that Move’s “Search by Map” and “Search by Zip Code” website functions infringed the patents. The district court issued summary judgement of non-infringement.

Claim 1 of the ‘989 patent was at issue on appeal and was directed to a method for locating real estate properties using a zoom enabled map on a computer. Claim 1 provided:

1. A method using a computer for locating available real estate properties comprising the steps of:

(a) creating a database of the available real estate properties;
(b) displaying a map of a desired geographic area;
(c) selecting a first area having boundaries within the geographic area;
(d) zooming in on the first area of the displayed map to about the boundaries of the first area to display a higher level of detail than the displayed map;
(e) displaying the first zoomed area;
(f) selecting a second area having boundaries within the first zoomed area;
(g) displaying the second area and a plurality of points within the second area, each point representing the appropriate geographic location of an available real estate property; and
(h) identifying available real estate properties within the database which are located within the second area.

Direct Infringement. In a prior appeal the Federal circuit determined that “selecting an area” as recited in steps (c) and (f) of claim 1 meant that “the user or a computer chooses an area having boundaries, not when the computer updates certain display variables to reflect the selected area.”

The Move system allowed the user to select a predefined area, such as a city, and the system would then zoom into the map according to the predefined boundaries of the area. The court found that the system did not “select an area having boundaries” by showing the predefined area after a user selected the area. Rather the computer just retrieved the map associated with the user’s choice. Therefore Move did not directly carry out the (c) and (f) steps of the claim.

Since Move did not directly carry out all of the steps, it must have direct or control over the performance of the missing steps by another party to be liable for direct infringement. The court found that it did not exert the required direction or control over its users to be liable for direct infringement.

Indirect infringement. The Federal Circuit found that the district court did not conduct the required analysis as to whether Move could be liable for inducing infringement by inducing its users to perform the claimed steps that Move did not itself perform.

Claim Language Suggestions. To allow for direct infringement, the claims could have been worded differently. Assuming the following was supported by the specification and permissible by the prior art, step (c) could have provided “receiving from a user a selection of a first area having boundaries within the geographic area” and step (f) could have provided “receiving from a user a selection of a second area having boundaries within the first zoomed area.” Such language might provide a better case for direct infringement.

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