Transcript Computer Software Patents

Computer Software Patents
David K. Friedland
Lott & Friedland, P.A.
Coral Gables, Florida
www.patentfla.com
© 1999 David K. Friedland & Anton J. Hopen
Why software patents?
• Typical scenario involves
companies losing a major dispute
before realizing the importance
of software patenting.
• Microsoft -- 300+ patents, 200+
for software products
– operating systems
– application programs
– user interface programs
© OR PATENT YOUR
SOFTWARE?
• Lotus v. Borland
– "menu command hierarchy" of Lotus 1-2-3
spreadsheet software was a method of operation
• Protectable by Patent
• Not Protectable by ©
• Other concerns:
– cost
– scope of protection
A Growing Trend
Software Patents
12000
10000
8000
6000
Patents Sought
Patents Issued
4000
1995
1994
1993
1992
1991
1990
1989
1988
0
1987
2000
SECTION 101
• Whoever invents or discovers ANY new
and useful process, machine, manufacture,
or composition of matter, or ANY new and
useful improvement thereof, may obtain a
patent therefor, subject to the conditions and
requirements of this title.
• Is a result obtained via software application
a machine or an unpatentable algorithm?
SOFTWARE PATENTABILITY
STANDARDS
• Traditional - Section
101
– ANYTHING UNDER
THE SUN THAT IS
MADE BY MAN
•
•
•
•
PROCESS
MACHINE
MANUFACTURE
COMPOSITION OF
MATTER
• 21st Century View Abstract Ideas
– Practical Application?
• Useful, Concrete,
Tangible Results??
– ARRHYTHMIA
(‘92)
– ALAPPAT (‘94)
– STATE STREET
BANK (‘98)
Software Patents: The
Beginning
• Gottschalk v. Benson, 409 U.S. 63 (1972).
• “Process” defined?
• Difficulty with the word “algorithm”
What is an Algorithm?
• “Mathematical” algorithms - unpatentable
subject matter if represent nothing more
than abstract ideas.
– In re Benson
• “General” algorithms - patentable subject
matter if process described does not solve a
mathematical problem, directly or
indirectly.
– In re Toma & In re Freeman
Patentable Subject Matter
– Typesetting and Printing (Freeman - 1978)
• “In a computer display system . . . A data processor . . .”
– Manufacture of Molded Rubber (Diehr - USSC - 1981)
• “A method of operating a rubber-molding press . . . with the aid of a digital
computer . . .”
– Seismic Exploration (Taner - 1982)
• “A method of seismic exploration by simulating . . . the reflection response of
the earth to seismic energy . . .”
– Voice Recognition System (Iwahashi - 1989)
• “An auto-correlation unit for providing . . . coefficients for use . . . iIn pattern
recognition . . .”
Unpatentable Subject Matter
– Seismic Measurement (Walter - 1980)
• “The improved method of correlating . . . sampled signals. . .”
– Medical Diagnostic System (Meyer - 1982)
• “A process for identifying locations of probable malfunction in a complex
system. . .”
– Medical Diagnostic System (Grams - 1989)
• “A method of diagnosing an abnormal condition in an individual . . .
characterized by a plurality of correlated parameters . . . comprising data . . .”
Overall Result Controls
• Arrhythmia Research Tech. V. Corazonix Corp.
– Method of analyzing electrocardiograph signals
using a computer to diagnose heart attack patients.
– Lower court held patent invalid.
– Federal Circuit reversed:
• Overall results (not the process) controlled.
• Conversion of one physical electrical signal to another
signal was a useful, concrete, tangible result.
More Decisions
•
•
•
•
•
In re Schrader
In re Alappat
In re Warmerdam
In re Lowry
In re Trovato
PTO Guidelines - Patentable
• Machine that is directed by a computer
program;
• A computer-readable memory; and
• A computer-implemented process
PTO Guidelines - Unpatentable
• Compilation or arrangement of data,
independent of the physical element;
• Memory encoded with creative/artistic
expression (e.g., a music CD);
• Data structures; and
• An algorithm that manipulates only abstract
ideas (e.g., an equation).
State Street Bank
• Data processing system for maintaining a
complex financial structure
– Hub and Spoke configuration
– District Court used proposed Guidelines in
analysis
– Freeman-Walter-Abele Tests applied:
• Mathematical Algorithm
• Physical Transformation
• Court FAILED patent on both tests
STATE STREET BANK
“HUB & SPOKE®” SYSTEM
Federal Circuit -- Claim 1 is directed to a machine, not a process
State Street Bank Decided
• Mathematical Algorithm Exception
– USEFUL, CONCRETE, AND TANGIBLE
RESULT = PATENTABLE.
– TRANSFORMATION OF DATA INTO A
FINAL SHARE PRICE “CONSTITUTES A
PRACTICAL APPLICATION OF A
MATHEMATICAL ALGORITHM, FORMULA,
OR CALCULATION”.
State Street Bank Decided
(cont’d)
• Business Method Exception
– Under 1952 Amendments to Patent Act,
business methods are subject to same legal
requirements for patentability as any other
process or method.
– 1996 revision to MPEP deleted guideline that
“a method of doing business can be rejected as
not being within the statutory classes”.
State Street - Opportunity & Risk
• 1/11/99 - U.S. Supreme Court denies review
of State Street Bank.
• “This is a significant legal outcome that
financial institutions should take heed of.”
• “The new ground that is plowed by this
decision should encourage companies to
rethink how they develop and monitor
business ideas.”
Post-State Street Bank
Strategies for the Practitioner
• Don’t direct claims to descriptive material
per se.
• Introduce independent physicals acts if
possible.
• Express pre-computer process physical acts
as separate limitations in the claim.
More Strategies
• Post-computer acts should amount to a
“significant” use, not solely mathematical
output.
• Claims should be limited to practical
applications.
U.S. PATENT NO. 5,794,207 - PRICELINE.COM
The End
This presentation will be available for
viewing at http://www.patentfla.com