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Category Archives: Statutory Subject Matter

SoCal IP Institute :: September 15, 2014 :: Section 101 Patentable Subject Matter Bloodbath

Our weekly SoCal IP Institute meeting on Monday, September 25, 2014 will be a discussion of several recent cases and trends related to 35 U.S.C. Section 101 patentable subject matter.  Over the past few weeks, several financial services and software-related patents have been found unpatentable under Section 101.  A good summary article may be found here.  We will discuss a few representative cases.  Brief synopses of the cases we will discuss appear below.

Tuxis Technologies, LLC v., Inc., No. 13-1771-RGA (D. Del. September 3, 2014) (available here). Amazon’s motion to dismiss for failure to state a claim on a patent on a method of “upselling” to a consumer using a computer system was found not to present patentable subject matter.  As a result, the case was dismissed on the pleadings.  The court found that the patent failed to meet the Alice criteria of providing some “inventive concept” beyond the abstract idea, in this case, of “upselling.”  The court did not find it here.

Eclipse IP LLC v. McKinley Equipment Corp., No. 14-154  (C.D. Cal. September 4, 2014) (available here). The court characterized this patent as directed to “asking someone if they are available to perform a task and then either waiting for them to complete 26 it or contacting the next person.”  The court further stated “[t]he claim recites that the method is performed ‘in connection with a computer-based notification system,’ which Eclipse argues saves the claims because ‘every asserted claim of the ‘681 patent requires a specially programmed computer system and a specially-equipped PCD to implement the invention and to achieve its benefits.'”  The two other patents relate to asking whether individuals are able to go to locations (deliver goods or pick up individuals) and, if not, seeking others to go to locations.  The court here found that these claims similarly do not provide any “inventive concept” as required by Alice. The court granted McKinley’s motion to dismiss.

Every Penny Counts, Inc. v. Wells Fargo Bank, N.A., No. 11-cv-2826 (M.D. Fl. September 11, 2014) (available here). Here, the two asserted patents “claim, respectively, a method of and a system of automated saving or automated charitable giving.” For example, the dollars and cents amount of a bank customer’s credit card purchase is “rounded up” to the next whole dollar. The difference between the dollars and cents amount of the purchase and the next whole  dollar, to which the amount is “rounded up,” is withdrawn from the customer’s bank account and deposited into a recipient account for personal saving or charitable giving.  The court describes the method as follows:

The ’849 patent’s “representative” method, Alice, 134 S. Ct. at 2359, comprises (1) electronically receiving data, including the transaction amounts,6 (2) modifying the transaction amounts in accord with a formula, (3) depositing the differences between the modified and unmodified transaction amounts into one or more recipient accounts, and (4) adjusting each account balance accordingly. The function performed by the computer at each step of the method is “purely conventional.”

In sum, the ’849 patent, a method patent, is invalid under Section 101 because the patent claims an abstract idea that is implemented by “well-understood, routine, conventional activities previously known to the industry.”

Thus, Wells Fargo’s motion for summary judgment was granted.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, September 15, 2014 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.


SoCal IP Institute :: September 8, 2014 :: Trademarks and Patentable Subject Matter

Our weekly SoCal IP Institute meeting on Monday, September 8, 2014 will be a discussion of a recent trademark decision and a recent decision on patentable subject matter from the District of Delaware. Brief synopses of the cases appear below. Panda Kroll, Esq., will lead the discussion on the trademark case.

Blackhorse v. Pro-Football, Inc., Cancellation No. 92046185 (TTAB June 18, 2014) (available here), involves a case of what constitutes disparaging trademarks. The marks at issue were REDSKINETTES (typeset word(s)), REDSKINS (typeset word(s)), THE REDSKINS (drawing which includes word(s)), WASHINGTON REDSKINS (drawing which includes word(s)), WASHINGTON REDSKINS (typeset word(s)), and THE REDSKINS (drawing which includes word(s) in stylized form). The registrations for the marks above were issued in 1990, 1978, 1974, 1974, 1974, and 1967 respectively.

The Board applied a two-step analysis in finding that the marks were disparaging.  The steps are: “a. What is the meaning of the matter in question, as it appears in the marks and as those marks are used in connection with the goods and services identified in the registrations?” and “b. Is the meaning of the marks one that may disparage Native Americans?” The Board found that the Pro Football, Inc.’s alleged honorable intent and manner of use do not contribute to the determination of whether the term is disparaging. The record established that at least thirty percent of Native Americans found REDSKINS used in connection with Pro Football, Inc.’s services to be disparaging at the time they were registered. The Board found this number to be substantial.


Walker Digital, LLC, v. Google, No.: 11-318-LPS (D. Del. 9/3/2014) (available here). The plaintiff sued Google for infringing two of its patents related to facilitating employment searches. Google filed a motion for summary judgment asserting that the patents were invalid under 35 U.S.C. 101. The district court held the patents invalid.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, September 8, 2014 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

SoCal IP Institute :: July 28, 2014 :: Subject Matter Eligibility Post-Alice and Stays in view of CBM Reviews

Our weekly SoCal IP Institute meeting on Monday, July 28, 2014 will be a discussion of two Federal Circuit cases.  The first pertains to subject matter eligibility.  The second pertains to the grant of a stay during the pendency of a later-filed covered business method patents review. Brief synopses of the cases appear below.

Digitech Image Tech., LLC. v. Electronics for Imaging, Inc. et al, No. 2013-1600 etc. (Fed. Cir. July 11, 2014) (available here).  The plaintiff asserted a patent related to an “improved device profile” for the color and spatial profile of devices such as digital image processors, such as digital cameras.  On motion of several defendants, the district court found that the patent’s “improved device profile” amounted to data that was not within the categories of statutory subject matter under Section 101.

The Federal Circuit, here, agreed with the district court finding that the device profile claims were directed to data, which is not one of the identified categories and, further, that the method claims are directed to an “abstract idea” and, therefore are not eligible for patent protection.

VirtualAgility Inc. v., Inc. et al., No. 2014-1232 (Fed. Cir. July 10, 2014) (available here).  VirtualAgility sued several defendants in January of 2013. In May of 2013, some of those defendants sought review under the new AIA CBM patent review process.  Specifically, the defendants asserted that the patent was invalid under Sections 101, 102, and 103.  Shortly thereafter, the defendants sought a stay in the case.  The district court denied the motion in January of 2014, with claim construction then due to be completed in April.

The Federal Circuit entered a stay pending interlocutory appeal (available under the AIA for refusals to grant stays).  Under a very careful review of the four factors set forth in the statute, the Federal Circuit found that the district court incorrectly evaluated two of the factors and, therefore, three of the four weighed in favor of granting a stay.  Accordingly, the district court was reversed and the stay was granted pending completion of the CBM review.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, July 28, 2014 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

SoCal IP Institute :: September 23, 2013 :: Subject Matter Jurisdiction, Here and Abroad

Our weekly SoCal IP Institute meeting on Monday, September 23, 2013 will be a discussion of two recent subject matter jurisdiction cases.  The first case is from the Federal Circuit, the second case is from the High Court of Justice, Chancery Division, Patents Court in the United Kingdom. Brief synopses of the cases appear below.

Accenture Global Services, GMBH et al. v. Guidewire Software, Inc., Case No. 2011-1486 (Fed. Cir. September 5, 2013) (available here).  Accenture filed suit against Guidewire alleging infringement of the ’284 patent as well as asserting various state law claims. Guidewire asserted multiple affirmative defenses including that the patent was invalid under 35 U.S.C. § 101 for claiming non-patent-eligible subject matter. Guidewire moved for summary judgment, asserting that the patent was invalid because claims 1, 8, and their related dependent claims did not meet the machine-or-transformation test.  Because the Supreme Court had by then granted certiorari in Bilski, but had not yet issued its own decision, the district court denied the motion for summary judgment without prejudice, allowing Guidewire to renew the motion after a Supreme Court decision issued.

The district court held that the ’284 patent was “directed to concepts for organizing data rather than to specific devices or systems, and limiting the claims to the insurance industry does not specify the claims sufficiently to allow for their survival.” Specifically, the court held that method claim 8 was patent-ineligible because none of the claim limitations restrict claim 8 to a concrete application of the abstract idea, and that the dependent method claims only add “limitations regarding potential claim information categories.” Id. at 621. The district court found that system claim 1 is patent-ineligible because the claim language “mirrors the language of the method disclosed in claim 8.” Id. Those conclusions, “in conjunction with the court’s prior conclusion that the [’284 patent fails] the machine or transformation test” led the court to grant the motion for summary judgment of invalidity under § 101.

The district court entered final judgment in favor of Guidewire.  After the Supreme Court issued its decision in Bilski, Guidewire renewed its motion for summary judgment, arguing that the ’284 patent is drawn to abstract ideas that fail the machine-or-transformation test. On May 31, 2011, after briefing from both sides, the district court again granted Guidewire’s motion for summary judgment, finding the claims of the ’284 patent ineligible because the claims are drawn to abstract ideas.

The judgment regarding the method claims was not appealed and is therefore affirmed.  The district court’s decision on patent-ineligibility of the system claims was also be affirmed, both because the system claims offer no meaningful limitations beyond the method claims that have been held patent-ineligible and because, when considered on their own, under Mayo and our plurality opinion in CLS Bank, they fail to pass muster.

Judge Rader disagrees finding that the court intentionally avoided consideration of non-abstract limitations in the claims in order to find the system claims patent-ineligible.

In the Matter of UK Patent application GB 1014714.8 in the name of Lantana LTD, CH/2013/0131 (September 4, 2013) (available here). The applicant here filed an appeal regarding a decision that the the application was not patentable subject matter.  The essence of the claim can be shortly stated.  The claim envisages two computers connected via the internet.  The user of the local computer wants to retrieve data from the remote computer.  When required, the local computer creates an email message containing machine-readable retrieval criteria and sends it to the remote computer.  The remote computer receives the email, works out if the email contains any machine readable instruction and, if so, executes that instruction, retrieves the data and sends back an e-mail containing the requested data.

Article 52 of the EPC which (as amended) reads:

(1) European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.

(2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:

(a) discoveries, scientific theories and mathematical methods;

(b) aesthetic creations;

(c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;

(d) presentations of information.

The recently-re-considered approach in the U.K is as follows

  • properly construe the claim;
  • identify the actual contribution;
  • ask whether it falls solely within the excluded subject matter;
  • check whether the actual or alleged contribution is actually technical in nature.

The signposts to a relevant technical effect (as modified in HTC v Apple) are:

  • whether the claimed technical effect has a technical effect on a process which is carried on outside the computer;
  • whether the claimed technical effect operates at the level of the architecture of the computer, that is to say whether the effect is produced irrespective of the data being processed or the applications being run;
  • whether the claimed technical effect results in the computer being made to operate in a new way;
  • whether the program makes the computer a better computer in the sense of running more efficiently and effectively as a computer;
  • whether the perceived problem is overcome by the invention as opposed to merely being circumvented.

The court held, among other things, that the fact that in an IBM case the method of communication between programs and files held at different processors within a known network was held to be patentable in 1988 does not mean that any method of communicating between programs and files on different computers over a network necessarily involves a technical contribution today.  Also, being novel and inventive, the rough equivalent of novelty and non-obviousness in the U.S., is not what takes a contribution outside the excluded area nor is it what makes an effect or contribution “technical”.

The court goes on to refute each of the proffered grounds for a technical finding and to find that each of the guideposts point to the contribution of the claims being non-technical.  Of interest, the “technical” contribution apparently is a moving target, dependent upon the current status of the art.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, September 23, 2013 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

SoCal IP Institute :: August 26, 2013 :: Common Law Rights of Publicity and Machine Readable Storage Medium

Our weekly SoCal IP Institute meeting on Monday, August 26, 2013 will be a discussion of a recent Central District of California decision regarding common law rights of publicity and a precedential case involving the patentability of “machine readable storage medium.” Brief synopses of the cases appear below.

Hebrew University of Jerusalem v. General Motors, Case No. 10-CV-03790 AHM (JCx) (C.D. Cal. Oct. 15, 2012) (available here).  Plaintiff Hebrew University of Jerusalem brought suit for the unauthorized use of Albert Einstein’s image in a General Motors advertisement.

General Motors argued that Mr. Einstein’s image was not protected by California law, but New Jersey law and that any right of publicity, to the extent one existed and to the extent that HUJ was entitled to the right, had ended.  Judge Matz of the Central District, applying New Jersey law, without any clear New Jersey precedent, determined that a 50-year post-mortum right of publicity is more than adequate to accomplish the policy goals of the law.  Accordingly, because Mr. Einstein died almost 60 years before HUJ brought suit, the case was dismissed.

Ex Parte Mewherter et al., Appeal No. 2012-007692 (P.T.A.B. May 8, 2013) (available here). The primary issue on appeal in this patent related to a computer-based system for converting a series of slide show images into raster images was whether “machine readable storage medium” was statutory subject matter.  Specifically, does the term “machine readable storage medium” encompass waveforms, signals and other so-called “transitory” media.  The Board, here, agreed that it does and endorsed the addition of the “non-transitory” language often requested by examiners as resolving the issue.  The Board also affirmed a written description rejection of claims 1-5 for the failure of the specification to support the claimed limitations.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, August 26, 2013 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

SoCal IP Institute :: July 1, 2013 :: The Line Between Patent and Antitrust &Undue Experimentation Under 35 U.S.C. 112

Our weekly SoCal IP Institute meeting on Monday, July 1, 2013 will be a discussion of a recent Supreme Court case regarding the line between patent and antitrust and a Federal Circuit decision on enablement. Brief synopses of the cases appear below.

FTC v. Actavis, Inc., Case No. 12-416 (U.S.  June 17, 2013) (available here).  In this case, the Supreme Court held that agreements amongst competitors involving one of the party’s patents do not a priori avoid antitrust liability because of the agreement pertained to a patent owned by one of the parties.  In this case, Solvay Pharmaceuticals obtained a patent for a product called AndroGel.  Two parties filed ANDA notices related to AndroGel and Solvay sued.  The parties subsequently settled with an agreement by the two parties not to enter the market in exchange for payments from Solvay.  The FTC sued alleging that the agreement was a violation of Section 5 of the FTC Act.  The district and appeals court agreed that the agreement did not raise antitrust concerns because any anticompetitive effects of a settlement fall within the scope of the patent’s exclusionary potential.  The FTC appealed and the Supreme Court held that the lower courts must at least consider and counterbalance the patent’s exclusion with any anticompetitive behavior applying the so-called “rule of reason” approach.  The Supreme Court did not go so far as to call such “reverse payment” agreements anticompetitive, but indicated that such situations may pose a problem under antitrust laws.

Wyeth v. Abbot Labs, (Fed. Cir. 2012-1223, 1224 (June 26, 2013) (available here).  Wyeth and Cordis appealed from a district court decision granting summary judgment that claims of two patents are invalid for non-enablement.  The Federal Circuit affirmed.  Specifically, the patents are related to the use of rapamycin for the treatment and prevention of restenosis.  The claims recite a method of treating “restenosis in a mammal . . . which comprises administering an antirestnosis effective amount of rapamycin to said mammal.  The repamycin refers to a class of compounds that were known at the filing date of the relevant applications.  The primary question on appeal was whether undue experimentation was required to use the invention, specifically to determine which repamycin, construed as “structural analogs to sirolimus that exhibit immunosuppressive and antirestenotic effects.”  The district court found that the claims did require undue experiementation,  thus rendering the patent non-enabled.

Specifically, the Federal Circuit found that even accepting the plaintiff’s argument that the molecular weight of compounds would have directed one of skill in the art to a subset of the potentially millions of viable compounds, that there remained tens of thousands of potential compounds that might be viable and would require screening by one seeking to practice the invention. Further, the court pointed out that appellant’s own witnesses testified that even minor alterations to the sirolimus molecule could impact its immunosuppressive and antirestenotic properties.  Because the “rapamycin” term was construed based upon its functional properties, not as any specific compound or group of compounds, the Federal Circuit agreed with the district court, finding that the requirement to screen potentially thousands of potential compounds in order to practice the invention constituted “undue experimentation” making the patent non-enabling.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, July 1, 2013 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

SoCal IP Institute :: June 17, 2013 :: Gene Patent Eligibility and Federal Circuit Appeals Jurisdiction

Our weekly SoCal IP Institute meeting on Monday, June 17, 2013 will be a discussion of the recent Myriad case and a Federal Circuit decision on the court’s jurisdictional scope on appeal. Brief synopses of the cases appear below.

Assoc. for Molecular Pathology v. Myriad Genetics, Inc., Case No. 12-398 (U.S.  June 13, 2013) (available here).  In this case, the Supreme Court determined that patent claims directed to genes that occur naturally are not patentable subject matter under 35 U.S.C. 101.  However, the Court was careful to point out that, in this case cDNA was not a product of nature and, thus is patent eligible.

Robert Bosch, LLC v. Pylon Mfg. Crop. (Fed. Cir. 2011-1363, 1364 June 14, 2013) (available here).  The Federal Circuit took this case sua sponte and en banc to answer two questions. First, does 28 U.S.C. § 1292(c)(2) confer juris- diction on the Federal Circuit to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred? Second, does 28 U.S.C. § 1292(c)(2) confer jurisdiction on the Federal Circuit to entertain appeals from patent infringement liability determinations when willfulness issues are outstanding and remain undecided? The court answered both questions in the affirmative and returned the case to the panel for disposition on the merits.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, June 17, 2013 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

SoCal IP Institute :: May 13, 2013 :: CLS Bank Int’l. v. Alice Corp – Patent Eligibility of Software Under 35 U.S.C. § 101

Our weekly SoCal IP Institute meeting on Monday, May 13, 2013 will be a discussion of Section 101 patent eligibility in the recent CLS Bank Int’l. v. Alice Corp. en banc decision.  A brief synopsis of the case appears below.

CLS Bank Int’l. v. Alice Corp., Case No. 2011-1301 (Fed. Cir. May 10, 2013) (en banc) (available here).

We previously discussed CLS Bank Int’l. v. Alice Corp. here and here.  The Conejo Valley Bar Association’s Amicus brief, signed by some SoCal IP Law Group attorneys, is available here.

CLS sued Alice for a declaratory judgment of noninfringement of four patents (1, 2, 3, 4) generally directed to exchanging risk of financial derivatives.  The elements of each patent, expressed in various claim forms, may be automated and implemented using a computer.  Alice appealed the grant of a summary judgment at the district court that certain claims of the Alice patents were invalid.   A three judge Federal Circuit Panel reversed, holding the method, computer-readable media and system claims all patent eligible under 35 U.S.C. §101.  CLS sought rehearing en banc, and that request was granted.

This case is a plurality decision with seven judges (of ten total) agreeing as to the invalidity of some claims, but no more than five judges agreeing as to the basis for that outcome.  Specifically, a seven judge plurality of the court affirmed the district court’s decision with respect to the method and computer-readable medium claims finding that those claims recite patent-ineligible subject matter under 35 U.S.C. § 101.  The decision on the system claims is split five / five, falling back to the district court’s determination of patent ineligibility even though eight judges found that method and system claims should rise and fall together.  As a result of the split, the outcome is decided, but nothing in any opinion is precedent. The various opinions are the result of the en banc rehearing ordered in response to CLS’ request.

The majority opinion summarizes the current state of 101 jurisprudence as follows:

While simple enough to state, the patent-eligibility test has proven quite difficult to apply. . . . What is needed is a consistent, cohesive, and accessible approach to the § 101 analysis—a framework that will provide guidance and predictability for patent applicants and examiners, litigants, and the courts.

The majority opinion, written by Lourie and joined by Dyk, Prost, Reyna and Wallach, reviewed Supreme Court precedent and summarized the resulting case law as directing the court in several ways. First, the claim must not be abstract so that it, “subsume[s] the full scope of a fundamental concept.”  If so, the court must look for “meaningful limitations that prevent the claim as a whole from covering the concept’s every practical application.”  Second, the application must not be overly formalistic.  If they were, the majority cautioned, subject-matter eligibility may depend only on the draftsman’s art or the skill of the individual or individuals preparing the claims. Finally, the majority indicated that the precedent urges a “flexible, claim-by-claim approach.”

The majority set forth a “systematic determination” based upon this approach.  First, one must determine “whether the claimed invention fits within one of the four statutory classes set forth in § 101 and, if so, whether any of the exceptions (abstract idea, law of nature, etc.) applies.  When § 101 questions arise, the court should determine what fundamental concept appears to be “wrapped up in the claim, so that the subsequent steps can proceed on a consistent footing.”  The court summarized this step:

In short, one cannot meaningfully evaluate whether a claim preempts an abstract idea until the idea supposedly at risk of preemption has been unambiguously identified.

At this stage, a claim construction may be useful in determining the preempted idea.  Once the idea is “nailed down,” “the balance of the claim can be evaluated to determine whether it contains additional substantive limitations that narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.”  These limitations may be called the “inventive concept,” but are directed more to a distinction over an abstract idea or law of nature than to their actual content as containing the invention for purposes of §§ 102 and 103.  The inventive concept must be more than a trivial (“routine” or “conventional”) appendix to the otherwise abstract idea.  The majority also noted that courts need not consider § 101 first and that all patents maintain a presumption of validity, including § 101 validity.

Following this procedure with respect to the Alice claims, the majority here found that none of the recited steps of the claimed process moved the claimed hedging risk for transactions between two parties using a intermediary “shadow account” to ensure that both parties have sufficient funds to complete a transaction beyond mere abstract idea.  The use of the computer to do so did not add “significantly more” to this abstract idea.  Specifically, the computer-implemented recitations were viewed as almost illusory, the requirement of a supervisory institution, the court found, amounted to nothing more than a traditional escrow service and, finally, the end-of-day instructions were required to cause the method to work.

The majority opinion found similarly with respect to computer-readable medium claims and system claims.  In particular, the majority found that both claims should be considered effectively identical for purposes of § 101 eligibility.  In addition, for the the system claims, the inclusion of “a computer,” “a data storage unit,” and “a communications controller” were irrelevant because all computers include such systems.  Because two other judges agreed with the outcome of the majority, but not with the methodology, all asserted claims were found invalid under § 101.

A concurring-in-part and dissenting-in-part opinion was filed by Judges Rader, Linn, Moore and O’Malley.  This opinion quibbled with the methodology arguing for a “meaningful limitation” on the method claims and to a “specific way” of doing something on a computer or a “specific computer” for doing something in system claims.  Judges Linn, Moore and O’Malley would reverse the district court with regard to the system claims (thus making those claims patent eligible).  Judges Rader and Moore would affirm that the method and media claims were patent ineligible.

A separate dissenting-in-part opinion by Judges Moore, Linn and O’Malley set forth their reasoning for finding the method claims patent eligible.  Linn and O’Malley filed a dissent explaining that method and system claims need not rise and fall together and that the other opinions fail because they are divorced from the record of the case regarding the claims.

A separate opinion, concurring-in-part and dissenting-in-part filed by Judge Newman agreed with the majority view that the method and system claims rise and fall together, but would find that all the claims are patent eligible.  Judge Newman succinctly summarized the plurality:

In deciding to rehear the patent dispute between CLS Bank and Alice Corporation, the en banc court undertook to remedy distortions flowing from inconsistent precedent on section 101. This remedial effort has failed.

Finally, Judge Rader also filed some “additional reflections” suggesting that all lawyers and judges should, perhaps consider:

When all else fails, consult the statute!

He suggests that all of this inventive discussion is far from the real issue at hand and that, generally speaking, a return to a simpler view of the statute would perhaps be the best path to follow in order to bring some clarity to these issues.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, May 13, 2013 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

SoCal IP Institute :: July 16, 2012 :: Patentable Subject Matter and Assignments

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, July 16, 2012. Brief synopses are presented below.

CLS Bank Int’l v. Alice Corp. Pty. Ltd., Case No. 2011-1301 (Fed. Cir. July 9, 2012) (attached).

Alice sued CLS for infringement of four patents claiming methods, systems and computer programs for “a computerized trading platform for exchanging obligations in which a trusted third party settles obligations between a first and second party so as to eliminate ‘settlement risk’.  Settlement risk is the risk that only one party’s obligation will be paid, leaving the other party without its principal.”  Slip Op. at 2. The district court granted summary judgment of invalidity based on a failure to claim patent eligible subject matter.

On appeal, the Federal Circuit reversed the district court, looking at notable precedent, such as the machine or transformation test and computer-specific opinions, which the majority summarized into the rule that “a claim that is drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than the idea of doing that thing on a computer may not.”  Slip Op. at 18.  The Federal Circuit identified a new rule that minimizes the need to make such a determination and strongly favors a conclusion of patentable subject matter when claims involve anything that might not be characterized as an abstract idea.  Applying this rule, the Federal Circuit concluded that Alice’s claims were directed to patent eligible subject matter. The Court emphasized the need to consider the claim as a whole rather than to generalize the invention as the district court did.

Preston v. Marathon Oil Co., Case No. 2011-1013, 2011-1026 (Fed. Cir. July 10, 2012) (attached).

Marathon hired Preston to work in Marathon’s coal bed methane well operation. After beginning work, Preston signed an Employee Agreement containing an IP assignment clause. Later, Preston developed a baffle system to improve machinery used to extract methane gas from water-saturated coal in a coal bed methane gas well. Marathon installed the system on wells. After Preston’s employment ended, both Marathon and Preston pursued patents. The district court declared Marathon the owner of the patents pursuant to the employment agreement and that Preston breached the agreement for failing to assign his rights. The Federal Circuit affirmed that Preston assigned his rights in two inventions to Marathon pursuant to his employment agreement, but vacated in part as to the judgment that plaintiff is in breach of that agreement because that assignment was automatic.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, July 16, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: April 2, 2012 :: Patenting Laws of Nature and Damages Enhancement for Willful Conduct

We will be discussing a Supreme Court case and a 9th Circuit case during our weekly SoCal IP Institute meeting on Monday, April 2, 2012. Brief synopses are presented below:

Mayo Collaborative Servs. v. Prometheus Labs., Inc. (March 20, 2012) (attached).

Prometheus holds two patents which concern the use of thiopurine drugs in the treatment of autoimmune diseases. When a patient ingests a thiopurine compound, his or her body metabolizes the drug, causing metabolites to form in the bloodstream. Because the way in which people metabolize thiopurine compounds varies, the same dose of a thiopurine drug affects different people differently.  Those in the field did not know the precise correlations between metabolite levels and likely harm or ineffectiveness. The claims at issue set forth processes embodying researchers’ findings that identified these correlations with some precision. Prometheus sells diagnostic tests that embody these processes. For some time, Mayo bought and used these tests. In 2004, Mayo announced that it intended to begin using and selling its own test. Prometheus then brought this suit. The trial court reasoned that the patents claim natural laws that are not patentable. The Federal Circuit disagreed, finding that in addition to natural correlations, the claimed processes specified steps that involve the transformation of the human body or blood taken from the body.

In a unanimous decision, the Supreme Court stated that the claimed processes did not transform unpatentable natural laws into patent-eligible applications of those laws. The steps in the claimed processes involved well understood, routine, conventional activity previously engaged in by researchers in the field.  The court stated that the patent claims did not add enough to their statements of the correlations to allow the processes they described to qualify as patent-eligible processes that applied natural laws. The “administering,” “determining,” and “wherein” steps were not sufficient to transform the nature of the claims. These steps added nothing specific to the laws of nature other than what was well understood, routine, conventional activity, previously engaged in by those in the field.  The court held that the patent claims at issue effectively claimed the underlying laws of nature themselves and consequently, were invalid.

Skydive Arizona, Inc. v. Quattrocchi, Case No. 10-16099 (9th Cir. Mar. 12, 2012) (attached).

In a suit by the owner and operator of a skydiving center against the operator of an internet and telephone-based skydiving advertising service for false advertising, trademark infringement and cybersquatting: 1) the district court’s grant of partial summary judgment to the plaintiff on its false advertising claim is affirmed, where the district court did not err in finding materiality based upon a declaration and evidence from other consumers rather than the results of a consumer survey; 2) the district court did not abuse its discretion in upholding the jury’s award of actual damages and lost profits; and 3) the district court’s actual damages enhancement is reversed because it hinged upon punishing the willful conduct of the defendant.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, March April 2, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.