Transcript The 5 Most Important Contracts for Retaining Value in Your

Software Related Inventions
Patentable Subject Matter
Donald M. Cameron
2014
Donald M. Cameron
2
Introduction
 Why be concerned about patentability of
software?
 This is a quickly changing area of law
 Many smaller businesses (technology companies)
don’t receive investment unless they can get patents
 It illustrates how the courts and patent offices grapple
with issues of new patentable subject matter.
3
Introduction
Cont.d
• What is excluded from patentability?
– Mere formula, equations, theorems.
– Inventions requiring input of professional skill and
judgment.
– Automating a known process.
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Canada – Statutory Definition
Must be an “Invention” under the Patent Act.
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“Invention” means any new and useful
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Art;
Process;
Machine;
Manufacture; or,
Composition of matter … (s.2 Patent Act)
No patent shall be granted for any mere scientific
principle or abstract theorem (Sub-s. 27(8) Patent
Act).
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Introduction
Cont.d
 Some key Doctrinal Questions
 If the basis of software is an algorithm (which is a
type of mathematical formula) how do we:
 permit software patenting?
 despite prohibitions on patenting mathematical
formula?
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Introduction
Cont.d
 Why does the Patent Act exclude formulae,
equations, theorems?
 Potentially too broad scope of coverage?
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Introduction
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Cont.d
What will we consider?
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Hardware
Software
Data Structures
Signals
Business Methods
Why are we concerned about these different aspects
of computer systems?
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Gives patent owner different people to sue.
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Customers vs. Competitors
Cross-Border Systems
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United States
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Patentability of software and business methods
had been thought to be resolved for years.
Software and business method inventions are
patentable when they produce a “real, concrete,
and tangible result”.
Key Decision: State Street Financial v. Signature
Financial Group Inc.
In the past 2-3 years, this has all changed.
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Europe
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Inventions require industrial applicability, novelty,
an inventive step, and a “technical character”.
Specific exemptions to patentability relate to
computer programs and business methods.
The European Patent Office (“EPO”) has
determined that certain computer-implemented
inventions are patentable but has stopped short on
business methods.
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Canada – Case Law
Shell Oil Co. v. Commissioner of Patents
(1982) 67 C.P.R> (2d) 1 (S.C.C.)
“Art” is a word of very wide connotation and not
to be confined … but extended to new and
innovative methods of applying skill or
knowledge provided that produce effects or
results commercially useful to the public.
This broad definition of art has been lately
restricted in Harvard Mouse and Monsanto v.
Schmeiser cases.
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The Common Principles
 You can’t patent math or
science
 You can patent applied
science
?
Where’s the dividing line?
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The Common Principles
 Claim 8.
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Cont.d
A method for calculating value “f”, comprising the step of”
Calculating f = m · a.
 Claim 9.
A computer implemented method for determining the force “f”
provided by a moving brick, comprising the steps of:
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Inputting variable “m”, where “m” is the mass of the moving brick measured
in kilograms;
Inputting variable “a”, where a is the acceleration of the moving brick
measured in meters per second per second;
Automatically calculating f = m · a, where “f” is the force provided by the
moving brick in newtons; and,
Displaying variable “f”.
 These are not proper subject matter.
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U.S.A. - Software
 AT&T v. Excel Communications
 method of processing long distance
carrier data
 was patentable
 does the number crunching produce a
 useful, concrete and tangible result
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U.S.A. - Software
 U.S.A.
Cont.d
Beauregard
 Inventive program on a disk
 But – what does the program or software
do?
Canada
 Schlumberger Canada Ltd. v. Commissioner
of Patents (1981), 56 C.P.R (2d) 204 (FCA)
 Measurements obtained in the boreholes are
recorded on magnetic tapes, transmitted to a
computer, modified by mathematical formula set out
in the specification and converted to human readable
form.
 Not patentable:
 “mere scientific principle or abstract theorem”
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Canada
Cont.d
 Schlumberger Canada Ltd. v.
Commissioner of Patents
“What the appellant claims as an invention here
is merely the discovery that by making certain
calculations according to certain formulae,
useful information could be extracted from
certain measurements. This is not, in my view,
an invention within the meaning of s.2”
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Canada
Cont.d
 The 1994 CIPO Guidelines:
 1.
Unapplied mathematical formulae are not
patentable
 2. Computer programs neither add to nor subtract
from patentability
 3. Computer program integrated with traditional
subject matter is patentable
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Canada
Cont.d
In 2005, Canadian Patent Office issued new guidelines for Computer Implemented
Inventions. The provided suggestions for describing such inventions:
Hardware
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Are important elements: processors, memories, interfaces, displays and peripheral
devices described?
Is the interaction with the network described?
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Does the patent describe:
Software
Data
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Steps to be performed
Sequence to steps
Processes and algorithms
Interface
Does the patent describe the source and form of input data?
What is the flow of data?
How does software manipulate or modify data?
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Canada
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Cont.d
Software Claims – Distinctions without
Differences??
MOPOP
Acceptable: A computer program product comprising: a memory having
computer readable code embodied therein, for execution by a CPU for [list a
specific function], said code comprising:
[list code means]
Unacceptable: A computer program for [list a specific function] comprising:
[list code means]
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Where’s the dividing line?
software
Software
control
system
Hardware
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Data Structures
 Represent a physical implementation of a data
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model for organizing and representing
information which is used by a computer
program
The physical organization is responsive to the
attributes of the data rather than specific
content
 E.g. MP3, customer database, or DVD data
structure: organized and linked compressed
video data portions having an indexing system
or interface such as chapters, pointers, etc. to
access particular portions of the video;
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Data Structures – U.S.A.
In re Lowry (1994)
 data structure of database was patentable
 dictated how application programs managed
information; allowed the computer to operate
more efficiently
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Data Structures – Canada
 No case law
 CIPO Guidelines support patentability
 Claimed as a product
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Signal Claims
 A signal is data or information briefly
transmitted
 It is not stored in memory.
 E.g. Data communicated over the internet
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Signal Claims
Cont.d
 In Re Nuijten (500 F.3d1346, Fed. Cir. 2007.)
 A signal, standing alone, is not patentable.
 A new method of watermarking (adding data listener
cannot hear to an audio file, but which can be detected
by computer)
 Court held
 Manufacture must be tangible
 “Transient” or “fleeting” inventions are not patentable.
 The claimed signal is devoid of any semblance of permanence
during transmission.
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Signal Claims
Cont.d
 Contrast to:
 Chemical claims, where a fleeting “intermediate”
produced in a chemical reaction is patentable.
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Signal Claims
Cont.d
But Claims patentable for:
 method to watermark signal (add the inaudible
data)
 Device to watermark signal
 Storage medium containing watermarked signal
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Signal Claims
Cont.d
Signals – Canadian Manual of Patent Office
Practice
The following claim would be acceptable:
A carrier wave embodying a computer data
signal representing sequences of statements
and instructions which, when executed by a
processor cause the processor to [list a
specific function], the statements and
instructions comprising the steps of:
[list steps of method]
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Where’s the dividing line?
data
structure
software
Software
control
system
Hardware
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Business Methods – U.S.A.
 State Street Bank v. Signature Financial
 data processing system for administering mutual funds
 hub and spoke method
 calculated final share price = useful, concrete &
tangible result
 was patentable
 there is no “business methods” exclusion to
patentability
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Business Methods – U.S.A. Cont.d
Business Methods (Revisited)
In Re Cominskey (499 F.3d 1365 (Fed. Cir. 2007)
A method for mandatory arbitration, including the
steps of:
 enabling a person to enrol;
 Providing arbitration language;
 Conducting arbitration resolution;
 Determining an award or a decision that is final and
binding
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Business Methods – U.S.A. Cont.d
Court held this was not patentable
 Although the Patent Act says processes are
patentable, the term “process” should not be read
literally.
 Idea or algorithm cannot be patented, even if it has
practical application.
 Routine addition of modern electronics to an
otherwise unpatentable invention typically creates a
prima face case of obvious.
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Business Methods – U.S.A. Cont.d
In contrasts, earlier decisions held:
 That methods are patentable some step scould be
carried out with a human mind; or,
 Even where a person performing the method had to
think.
(A.T.&T. Corp. v. Excel (Fed.Cir, 1999))
(In re Musgrave (1970))
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Business Methods – U.S.A. Cont.d
In re Bilski (2008)
Claim for a method of hedging risk in the field of
commodities trading:
 Claims were admitted to not be limited to operation on a
computer.
 Is the process:
 Tied to a particular machine or apparatus?
 Transforms a particular article into a different state?
 Producing useful, concrete and tangible resuls
insufficient.
 Held to be non-patentable subject matter
Methods of Doing Business Europe
 Per se, not patentable
 Point of invention requires technical character
 If the invention relates to a new or improved
manner of conducting business, not technical so
not patentable
 If the invention can be characterized as having
technical character and makes a technical
contribution – improved processing technique
for example, then may be patentable
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Canada
 Progressive Games, Inc. v. Canada (Comm.
Patents) (2000) 9 C.P.R. (4th) 479 (F.C.A.)
affirming (1999) 3 C.P.R. (4th) 517 (F.C.T.D.)
 Method of playing poker
 Is shuffling cards an “art”?
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Approach of the Canadian Intellectual
Property Office
 Re: Application 564,175 to Atkins, Sep.
1999, (Comm. Patents)
 Post Motorola
 Applicant substitutes a computer
programmed in a specific manner to make
decisions which were formerly made by a
financial advisor - professional skill
 An operation which is not patentable when
carried out by an individual cannot be
made patentable merely by having it
carried out by a computer
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Professional Skills Not Patentable
The exercise of professional skill is not patentable but
invention may lie in systems for subdividing land. A
complete description of the hardware, software and data
structures and the interactions with the data will go a
long way to establish patentable subject matter in a
computing application. A full description of the
hardware, program and data components in an
integrated system, and an amended claim 12 defining
the inventive features of the computer implementation of
the method, may elevate the subject matter from a mere
method belonging to a professional field into an art,
process or machine of section 2 of the Patent Act.: Manual
of Patent Office Procedure
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Approach of the Canadian Intellectual
Property Office Cont.d
 Re Patent App. No. 2,203,302, Dec. 9, 2004
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(Comm. of Patents) – Rankin Research Corp.
Vehicle tracking system using a cellular network
to track a stolen vehicle.
Rejected by Examiner for requiring human
intervention
PAB concludes human intervention limited to
steps which are of a routine nature and do not
require a high degree of training, judgment and
decision making are permissible
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Where’s the dividing line?
Business
methods
data
structure
software
Software
control
system
Hardware
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Closing Thoughts
 Guidelines do not have the force of law
“This manual is to be considered solely as a guide, and
should not be quoted as an authority. Authority must be
found in the Patent Act, the Patent Rules, and in decisions
of the Courts interpreting them”
 How much of this is a de facto obviousness
analysis?
 What is the law in Canada, when there is so little
law in Canada?