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IP, Patent, Risk Mangement

Warning: Patent Analyst Shouts At The Rain

A three member panel of the esteemed Court of Appeals for the Federal Circuit (CAFC) have collaborated to imagine that a “computer-readable medium containing program instructions” that causes a computer system to carry out specific steps is somehow a “mental process”.  In the process, the CAFC told would-be inventor John Pettitt that his Patent No. 6,029,154 is not actually an invention.  Hopefully the patent owners will ask all of the CAFC judges to weigh in on a number of issues, including the panel’s outrageous construction of a patent claim reciting data processing of machine-generated, machine-exchanged information to include a purely “mental” process or using “pencil and paper.”

The opinion’s author, Judge Timothy Dyk, also once wrote that re-writing claim language to expressly state elements that were already incorporated by reference somehow changed the scope of the claim.  Hopefully Judge Dyk will be unsuccessful in this new endeavor of convincing his fellow judges to adopt his illogical premises.

The case is Cybersource v. Retail Decisions, decided on August 16, 2011.  Until the full CAFC convenes and restores some logic to decision-making, the opinion provides lower courts with guidance telling them to:

1. ignore claim language that inconveniently counsels against eradicating a patent owner’s rights, and
2. invalidate claims applying the useful claim construction tool known as reductio ad absurdum

Of course, the odds suggest that the full lineup of CAFC judges will decline the opportunity to reconsider Judge Dyk’s flawed argument, leaving on the US Supreme Court with the opportunity to, once again, bench-slap these judges silly.  This, too, is unlikely.

So what does the opinion mean?  For one thing, many of you will be receiving countless “client alerts” and other non-sense commentary from your outside counsel, sure to be riddled with disclaimers and restrictions suggesting their opinions are not necessarily opinions.  But what does it mean in reality? In short, companies accused of infringing patents containing “method” claims and other claim types (e.g. systems or computer-readable mediums) will feel increasingly confident of their ability to invalidate patents on legitimate computer-implemented inventions.   Willingness to avoid litigation will be decreased, which means patent owner returns will be diminished, ultimately squeezing margins from inventors. Taking longer to earn less always works to the inventor’s disadvantage.  Financing continues to be available (don’t believe anyone who says this decision is an “NPE-killer”), but the buyers will always protect themselves, and NPEs will be more aggressive to compensate for any perceived change in position.

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Discussion

19 thoughts on “Warning: Patent Analyst Shouts At The Rain

  1. I always said that they were cooking up black magic in that building lol. Now there’s talk of a collaboration (conspiracy?) betwixt the members to consider a CRM a mental process.

    However, I have to disagree with you, they did not collaborate to consider a CRM a mental process. They collaborated to determine that the CLAIM to a CRM in fact is an attempt to preempt all uses of a mental process by controlling all the uses of it on a computer. Obviously, their reasoning is off a bit with regards to the CRM because they made a leap into it being a process claim. And to be sure, this is some legal gymnastics to try to avoid simply telling the person that they made an error in their drafting of the claim because here in the patent system we distinguish products in terms of their structure, not the function of unclaimed machines that respond to instructions on the product and not even the supposed “function” of that product in so far as nobody understands what structure that might be.

    However, one must remember, they had to engage on the 101 issue, this is a SJ action.

    Oh and also, patrick man, increase the font size for your text. Je sus. I have to zoom in just to read what you write and then it looks all comical.

    Posted by 6 | August 17, 2011, 1:20 am
    • “they did not collaborate to consider a CRM a mental process. They collaborated to determine that the CLAIM to a CRM in fact is an attempt to preempt all uses of a mental process by controlling all the uses of it on a computer.”

      And that’s better?

      If we want to revisit Beauregard, I’m all for it. I’m not saying they should necessarily be eliminated, but in light of this opinion, we might as well put that option on the table and get a rational decision.

      Watch yourself, or I’ll change the font to comic sans….

      Posted by Patrick | August 17, 2011, 8:04 am
  2. “And that’s better?”

    In a word: Technically.

    In a few more words, I’d note that nothing that comes out of the CAFC’s black cauldron has been “better” or “good” since its foundation that I’m aware of, and I’m aware of a lot of things which have thus sprung forth.

    Then I would note that the reason that it is “technically better” is because it is legally supportable. A CRM is not a mental process. Not even “legally speaking” in the sense that things done “legally speaking” can be divorced entirely from reality.

    However, a claim to a CRM can preempt all uses of an abstract idea (or a mental process which, as the court noted is a subset of just as surely as a process claim can, especially when you just did a legal backflip to allow the drafter to specify what the CRM is in terms of a method. A method performed on a piece of equipment distinct from that which was claimed no less! (I know you like how I just used !)

    Also, note that this bit about considering a CRM as a process is the CAFC doing the patentee a favor. If they did otherwise they’d simply hold the product claim improperly drafted and be done with it.

    Bottom line, don’t be surprised if you see a legal backflip or two in a case regarding a claim that requires a legal backflip to even be found somewhat near reasonably drafted.

    And finally I agree with you on the whole let’s just put the validity of all B claims up for grabs and get a rational decision on that. Which is why I hope for en banc review and just such a decision. I can assure you that if, by some miracle, this thing got to the USSC they’d be loled right out of the courtroom and I would get there at 3am in the morning to have a middle row seat right behind all the interested parties. I can’t believe I missed the oral arguments of this case.

    Posted by 6 | August 18, 2011, 11:35 am
    • “However, a claim to a CRM can preempt all uses of an abstract idea”

      No, it cannot. Regardless of whether you agree with Dyk’s position that the method in claim 3 can be performed with pencil and paper alone, one cannot preempt use of a computer-readable medium by performing a method in the mind or on paper.

      Posted by Patrick | August 18, 2011, 11:50 am
  3. That is not what I said Patrick.

    Try to keep up ol’ timer.

    I said a claim to a CRM can preempt all uses of an abstract idea. I mentioned nothing about preempting use of a CRM by performing a method in the mind or on paper.

    A CRM claim, like the instant claim at issue, can very well preempt all uses of an abstract idea if all uses of that abstract idea involves, at one point or another, information structures on a CRM.

    Read that sentence carefully. Don’t breeze through and misunderstand what I’ve said. I said you can preempt an abstract idea. And I said you can do it with a claim to a CRM. You usually accomplish this by adding field of use limitations, like the field of computing.

    For instance, can you, personally as a claim drafter, using CRM language, draft a claim to preempt all uses of the abstract idea of: recieving information related to a customer number, and processing the information related to a customer number, and then limiting the claim to the field of computing? Sure you can and people often do.

    And, even if you can’t because of some inherent personal mental limitations, many other people can.

    For instance, I can.

    A CRM with instructions thereon which, when executed by a computer, cause the computer to perform a method comprising: recieving information related to a customer number, and processing the information related to a customer number.

    If I get that claim, but for the limitation of the claim to the field of computing I control the entire abstract idea. Flook mentions what happens when a claim does just that.

    But in any event, there is a claim which would preempt all uses of the abstract idea listed above where the abstract idea has been limited only to the field of use of computers.

    Likewise with the instant claims the analysis is rather simple and did not require the court to consider the claim to be a method claim.

    Posted by 6 | August 18, 2011, 5:32 pm
    • “That is not what I said Patrick”

      I know it’s not, 6. I can read. I was making a broader point in a blog comment that maybe merits it’s own post. I’ll respond to the rest of your remarks later. Right now it’s miller time.

      Posted by Patrick | August 18, 2011, 5:46 pm
      • “Right now it’s miller time.”

        That might be the worse thing I’ve ever seen written on a patent blog, and I have seen a lot of bad things so written. I presume you make enough money to afford real beer: Yuengling. Just as one leaves behind Natty when one enters college, when one becomes a man one owes it to themselves to leave the Miller where it belongs, in college.

        Posted by 6 | August 18, 2011, 7:54 pm
    • Have you not seen the 2-D barcode scanning apps available for Android and iOS?

      Paper is a computer readable medium.

      Posted by patent.drafter | August 19, 2011, 8:36 am
  4. 6 –

    Fair enough, you said “abstract idea” and the in parenthesis wrote “or mental process.”

    My point is only that Judge Dyk seems to equate the two, i.e. if it can be done in the mind, or on pencil and paper, then it is abstract and can’t be patented. But to suggest that the CRM claim restricts someone from practicing the “underlying invention” on pencil and paper is just flat dishonest.

    Patent.Drafter —

    I agree that it’s time to revisit CRM claims, and in light of 2D, scanners, OCR and other technologies, the claim format needs to be at least revised.

    Posted by Patrick | August 19, 2011, 8:59 am
    • I do apologize, it appears my comment got a portion of it cut out in the comment above. Specifically, I was saying that mental processes are a subset of abstract ideas. In other words, they are a species within the genus of abstract ideas. And for that reason I agree with the good judge, he is not “confused” when he says they are one and the same, he is making a correct evaluation of the situation. Any mental process is necessarily an abstract idea by definition.

      “But to suggest that the CRM claim restricts someone from practicing the “underlying invention” on pencil and paper is just flat dishonest.”

      To be sure, he should not have said that it restricts people from utilizing the underlying invention, he should have said that it restricts someone from using the abstract idea but for the field of use limitations tacked on. Which, if you were conversing with him in person he’d probably tell you is what he meant.

      The jurisprudence on the “preemption doctrine” which was announced in Benson is very small, and the terminology used can tongue tie even the best of us. It is not until your 2nd or 3rd year of having studied specifically this issue, in earnest, that a given person will be able to conversationally discuss the matter. It is that difficult of a concept in my opinion. The fundamental concept, the judicial exceptions and the judges not liking to allow form to triumph over the substance of what they are excepting is simple, but to get down into the details is a GIGANTIC pain.

      Posted by 6 | August 19, 2011, 6:20 pm
      • 6 –

        Thanks for that clarification. I see your point. However, it is what Judge Dyk wrote that will guide future decisions, not what he may have meant … Even if CRM claims get thrown out altogether, I think we’d be better off with an en banc opinion that eradicates this whole mess and writes something a little more coherent.

        By the way, “preemption doctrine,” to lawyers, refers to something else entirely, but I know the language in Benson you’re referring to. I actually proposed a test back in December, not that anyone cares, that teases out the consistencies between the three Supreme Court “guideposts,” not that the CAFC has decided to adopt it. I do think it would be better, though:

        Benson and Flook both represent examples of patent claims the Court found to be non-statutory. Benson was denied a patent because the Court decided the inventor was overreaching, wanting to pre-empt the entire useful application of binary coded decimal conversion. Flook tried to limit his claim to petro-chemical processes, but was ultimately denied a patent because the claim was directed essentially to a method of using a mathematical formula. Flook‘s mention of petro-chemical processes was merely incidental.
        Diehr represents the only example of the three where the claim was found to be patentable. Here, a majority of the Court was convinced because the claims were directed to the application of a mathematical formula to a specific process, not to the formula itself.
        A test emerges that is consistent with these three guideposts, which looks to the end result of the claimed method to determine patentability. If the end result of the claimed method merely computes a mathematical formula, regardless of whether it is in the context of an environment, the method is unpatentable. However, if the end result of the claimed method accomplishes some result beyond just computing a formula, then method is likely patentable.

        https://gametimeip.com/2010/11/29/what-is-a-software-patent/

        Posted by Patrick | August 19, 2011, 6:35 pm
        • ” However, it is what Judge Dyk wrote that will guide future decisions, not what he may have meant”

          Of course I agree, but courts will often look back at the previous opinions with a critical eye towards what was actually said as opposed to the actual holding and how that would be supported by what was said.

          ” “preemption doctrine,” to lawyers, refers to something else entirely,”

          yeah I know, I started using it in this context because it makes it a lot easier to explain it to people. Perhaps I should call it the “exception preemption doctrine”. But I’m coining phrases here, no small task!

          “Benson and Flook both represent examples of patent claims the Court found to be non-statutory. Benson was denied a patent because the Court decided the inventor was overreaching, wanting to pre-empt the entire useful application of binary coded decimal conversion. Flook tried to limit his claim to petro-chemical processes, but was ultimately denied a patent because the claim was directed essentially to a method of using a mathematical formula. Flook‘s mention of petro-chemical processes was merely incidental.
          Diehr represents the only example of the three where the claim was found to be patentable. Here, a majority of the Court was convinced because the claims were directed to the application of a mathematical formula to a specific process, not to the formula itself.

          ^possibly the most beautiful thing I’ve ever seen in all of jurisprudence. It’s like the court quoted specifically from my own writings on the matter. It brings a tear to the eye. Indeed, the court’s subsequent bungling of the application of this “doctrine” likewise validates my position that it is very hard to wield properly.

          “A test emerges that is consistent with these three guideposts, which looks to the end result of the claimed method to determine patentability. If the end result of the claimed method merely computes a mathematical formula, regardless of whether it is in the context of an environment, the method is unpatentable. However, if the end result of the claimed method accomplishes some result beyond just computing a formula, then method is likely patentable.”

          ^that part is complete bunk. There is no such test that emerged. We look not to the “end result” of the method. We must look to what is actually happening in the claimed method, i.e. the steps.

          “However, if the end result of the claimed method accomplishes some result beyond just computing a formula, then method is likely patentable”

          Again, this is mostly bunk. The end result is not determinative of anything. He is at best noting a correlation between methods that do not fail under the preemption doctrine and have an end result beyond computing a formula. While he is correct that such a correlation exists, the end result has nothing ot do with the patentability of a given method.

          Posted by 6 | August 24, 2011, 5:19 pm
          • 6-

            You misunderstand. The argument you’re parsing is not from an opinion. It’s an argument I personally developed after Bilski. So, you’re right that there is no such test, but I’m saying there should be.

            “We look not to the “end result” of the method. We must look to what is actually happening in the claimed method, i.e. the steps. ”

            PotAto potAHto … The test is whether the claim is doing something (patent-eligible viz Diehr) or just performing math in the environment of a petro-chemical process (patent-ineligible viz Flook).

            Posted by Patrick | August 24, 2011, 6:07 pm
  5. The recent CyberSource decision indicates that the courts have started to see through patentees’ device of throwing in language to the effect of “performed using a computer” in order to make their method claims patentable. Hopefully, this decision will help to improve the quality of issued patents henceforth. Those in the anti-software-patent set should also be pleased with this ruling, which could potentially set the stage for invalidating patents on software.

    Posted by patent litigation | August 23, 2011, 8:21 am

Trackbacks/Pingbacks

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