Posts by: Anders Hansson | (12) posts

Important judgement on business method patent in the United States

On 20 June 2014, the U.S. Supreme Court handed down an important decision, Alice v. CLS Bank, clarifying the extent to which business methods can be patented. The earlier stages of the proceedings have been well covered in the media as this is one of relatively few times the Supreme Court has interpreted 35 U.S.C. § 101, with a potential to shape the future of computer-implemented inventions in general. Some of the claims at issue were actually not explicitly drawn to computer implementations or software, but the Court alleges it has considered the claims with an understanding that they “require generic computer implementation.”

One of Alice’s claims is found here, and the full judgement here. From the explosion of analyses by local practitioners, we were particularly impressed by 1, 2 and 3 and recommend them to you.

The judgement affirms the lower-instance judgment, which in turn is in keeping with current practice in the USPTO. In brief, the Court decided to revoke Alice’s patent because the method claims were allegedly directed to an “abstract idea” whose implementation was too generic to transform the idea into a patentable invention. The computer system and storage media claims were refused for the same reason; possibly the decision would have been different had the claims recited more implementation details. The language may be problematic to practitioners: just how abstract is an “abstract idea”? and is a programmable computer too “generic”? The challenging task of steering clear of “abstract ideas” and “generic implementation” is illustrated by the allowed and rejected claims from previous Supreme Court judgements: compare, in the same claim tableFlook and Diehr.

The present case highlights the limited usefulness of the concept “software patents.” While patents covering software typically cause little or no public debate when granted for inventions in conventional technology, software realizing business methods is more controversial. As shown by an overwhelming majority of the submitted amicus curiae briefs in Alice, the IT industry has a keen desire to dissociate itself from the “plague of abstract computer-related patents”, as the brief by Amazon, Google and others puts it. The brief cites Bill Gates in 1991 (in another court case), where he claims the software industry would have been at a “complete standstill” if the early inventors had applied for all the patents they could. The statement illustrates not only that the USPTO has become more stringent, but also reminds us of the much higher IP awareness in Mr Gates’ industry today, which has had to get used to – and benefit from – the existence of patents just like in other technical fields.

As European practitioners, we regularly ask American patent attorneys to prosecute our applications before the USPTO, making it essential for us to keep our drafting practices up-to-date, to be able to present the invention from the right angle and in all required detail. Unlike judgements like Bilski (2010), the Alice case represents no sudden change but will probably be received as a sign that the practice has stabilized. With its insistence on technical improvement, the Alice judgement in fact lands its conclusions rather close to the current European examination practice, despite its very different legal starting point.

The judgement should be reassuring also to Japanese applicants, whose applications are normally drafted to convince the JPO examiner that “information processing by software is concretely realized by using hardware resources” (JPO Guidelines, part VII), sometimes rephrased to mean that the implementation is “particularly suitable for a use purpose”. This intention should also limit abstraction and genericness.

Anders Hansson and Joacim Lydén, European Patent Attorneys

 

Fuelling up

Today CEO, central and regional management as well as all business unit managers gathered in Awapatent’s Gothenburg premises. The menu: inspiration talks, breakout sessions, updates on CRM tools, visionary thinking about the new year and solid planning for the next few weeks, along with preliminary 2013 figures.

Returning home, I’m pondering the pros and cons of having nearly 300 colleagues in two countries. There’s no denying that some aspects scale unfortunately with size. For one thing, our discussions about company-wide routines would be far less complex if the routines were intended for fewer people. Yet if our client records are maintained in a uniform fashion, we get a data set from which incredible statistics can be extracted.

It’s also a tempting idea that a smaller business could be more easily managed, e.g., a single- office firm whose managers don’t have to travel to meet. True maybe – what if I wouldn’t have had to leave Stockholm today! – but then we’d miss the sweet dynamics of parting and meeting. And without its two corporate cultures brought together under one roof, maybe Awapatent would have been an insular, narrow-minded place to work in?

Still on the train, I catch up with my emails. I’m reminded my client accounts range from cute start-ups to rather gigantic companies. I love the mix. If I’m reasonably on top of things – ah yes, the due date list – I have the luxury of choosing tasks to suit my daily mood. In a neat little boutique firm I’d surely be working with SMEs too, but it would probably take an effort to convince larger corporations we were the best choice for their cases. 

So while my body is complaining after today’s heavy programme and 900 km in a train seat, right now I can’t help feeling pretty well positioned.

Tuesday 21 January 2014

Anders Hansson, European Patent Attorney

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The on-sale bar under the AIA

Do non-public sales in Europe destroy novelty in the U.S.?

Among the many news that applicants have had to digest in the America Invents Act, the revised on-sale bar may be one of the more intriguing. Before the law reform, grant of a patent was excluded whenever

the invention was … in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.
(35 U.S.C. section 102(b); emphasis added)

I was then able to reassure my local clients that they could sell products or prototypes embodying a yet unpatented invention as long as the sales were secret and did not involve a U.S. buyer. Indeed the courts had clarified pre-AIA that also private sales, even offers to manufacture a new product, could destroy novelty and invalidate a granted patent.

Under the AIA, the same section reads:

A person shall be entitled to a patent unless (1) the claimed invention was … in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.
(35 U.S.C. section 102; emphasis added)

Section 103, concerning obviousness, has been amended similarly.

The geographic limitation “in this country” has been deleted. Clearly my clients’ activities within U.S. territory will count the same as outside.

So what about secrecy? An American friend – he’s actually a patent attorney friend – tells me that it’s quite unlikely that non-public sales will qualify. The language “on sale, or otherwise available to the public” is rather clear, suggesting that sales activities are relevant only to the extent they are public. This conclusion was not contradicted by any political statements during the legislation process, and the USPTO appears to embrace it.

However, the legislator deleted “in this country” but did not care to insert, say, “[on] public [sale]”. My friend tells me this fact could support an argument that the legislator did not intend to distinguish secret sales from non-secret sales.

It may take years before an influential U.S. court speaks on this matter. Till that time, we know that it is fairly safe to sell unpatented products under NDA. If you feel your inventions deserve better, remember to file before you sell – at least a simple first version.

Anders Hansson, European Patent Attorney

Russian documents unveiled

Russian is the 22nd available language in Patent Translate, a machine translation tool specially tuned – by Google and the EPO – to patent documents and patent lingo. In the particular case of Russian, I expect Patent Translate will be saying “claims” rather than “invention’s formula” and similar nonsense. The public can use Patent Translate to translate any patent document on Espacenet.

In a recent press release, the EPO says the new technology will have an impact also on the searches its examiners perform. Certainly, all important patent literature in Russian (1.5 million documents) was already searchable and indexed, often with English abstracts too, but the Office believes that access to full-text translations will increase the chances that relevant prior art is discovered and considered during examination. On top of this, the Russian Patent Office will be adopting the CPC classification system shortly (commented here).

At least in theory, patentees should feel less worried about Russian “submarines” that their competitors might fish up after grant.

What technical fields will benefit the most? As a first guess, I’ve compared the top ten IPC classes in the 5,000 most recent EP, RU and Soviet publications.

  European Patent Office (EP) Russian Federation (RU) Soviet Union (SU)
1 A61 Medical devices; hygiene A61 Medical devices; hygiene C07 Organic chemistry
2 H04 Electric communication C07 Organic chemistry A61 Medical devices; hygiene
3 G06 Computing G01 Measuring; testing B01 Phys./chem. apparatus
4 G01 Measuring; testing H04 Electric communication H01 Basic electric elements
5 C07 Organic chemistry G06 Computing A01 Agriculture; forestry
6 H01 Basic electric elements C12 Biochemistry; beer; wine G01 Measuring; testing
7 C12 Biochemistry; beer; wine A01 Agriculture; forestry C08 Polymers
8 B01 Phys./chem. apparatus B01 Phys./chem. apparatus B29 Working of plastics
9 C08 Polymers H01 Basic electric elements F16 Engineering elements
10 A01 Agriculture; forestry C08 Polymers C12 Biochemistry; beer; wine

Based on this rather unsophisticated analysis, there are just moderate differences between SU and EP patenting. Contemporary EP and RU documents are distributed in a very similar way in terms of IPC classes, meaning that the Russian material is likely to be relevant for a large percentage of the European patent applications. I’m curious to see if the EPO examiners will actually cite more Russian language documents in the next years.

Anders Hansson, European Patent Attorney and member of Awapatent’s Specialist Team for IP in Asia and Russia

A slip of the pen?

A claim for 90 MSEK worth of damages is being filed today in the Skellefteå District Court by 707 Chilean plaintiffs, who were poisoned by arsenic-containing waste products deposited near their hometown in the early eighties. The defendant, the Boliden mining group, had commissioned a Chilean company to take care of the waste according to best practice at that time. But according to the plaintiff side, Boliden knew that best practice was not good enough – as the background section of their patent application SE8001847-6 reveals:

“The arsenic content of such waste products is often up to 20–40 %, rendering it difficult to safely dump said waste products because of the enormous environmental problems created thereby, even though the prescribed safeguards per se have been taken.”

It will be a crucial point to prove that Boliden’s decision-makers were as knowledgeable about chemical hazards as their patent drafters. A not-unexpected defence – and maybe a successful one – might be to have a patent attorney confirm that patent backgrounds often are very concerned about the shortcomings of the prior art, to draw a flattering backdrop for the invention.

The new claim brings to mind a case (judgment of 27 May 2003 by Bavarian Administrative Court of Appeal in case 5 CE 02.2931) where the holder of European patent EP0236736 requested the German Patent Office not to publish his competitor’s patent DE4332545 unless the competitor removed his disparaging statements about the former’s beverage cans:

“EP0236736B1 … show[s] a tearable lid … These stiffening ribs are however interrupted … so that the achievable stiffening action is more or less lost. Because further the pulling ring is substantially immersed in the U-shaped seam, it is difficult to get hold of the ring with a finger nail …. Yet another drawback is the considerable mechanical tensions in the lid, which develop during manufacture as a consequence of the many seams and deformations, and which lead to undesired displacements in the plate.”

The holder of EP0236736 produced evidence that these statements were much exaggerated. He cited § 4 of the German Act Against Unfair Competition (UWG), by which discrediting statements are an unfair commercial practice.

The court noted that the Patent Office has no duty to scrutinise statements in the background section, so that the public ought to read that section of patent publications with caution. Further, most applicants will want to highlight their invention by stressing the disadvantages of earlier solutions, of course within reason and without downright insulting their predecessors. Moreover, while patent rights may be powerful business tools, the court couldn’t agree that patent publications have a significant commercial impact. This decided the matter and the background section in DE4332545 was left unchanged.

It will be very interesting to see what importance the court attaches to the statements in Boliden’s 1980 patent application.

Anders Hansson, European Patent Attorney, member of Awapatent’s Specialist Team Litigation

EPO Enlarged Board of Appeal repeats obligation to raise objections in time

Last week, the European Patent Office released two new decisions by the Enlarged Board of Appeal on petitions for review, R 2/11 and R 10/11. Both the underlying petitions were based on what the petitioners regarded as fundamental procedural defects before respective Boards of Appeal 3.2.04 and 3.2.03.

Both cases are appeals from opposition proceedings. In R 10/11, the Board had refused to discuss late-filed requests for claim amendments. In R 2/11, an Opponent had been allowed to make an oral presentation of the technical background. The Proprietor was taken by surprise by the Opponent’s presentation; he had not prepared his counterarguments, he could hear at least one half-truth in the presentation – and to his great horror, the presentation had a very convincing effect on the Board!                          

However, the Enlarged Board did not go into the details of neither case, but noted only that neither of the petitioners had raised an objection in respect of the procedural defect in due time. Indeed, as provided by Rule 106 EPC, the Enlarged Board shall not deal with a purported procedural defect unless the Board of Appeal has been made aware of it during the appeal proceedings.

Looking at the decisions on petitions handed down by the Enlarged Board in 2010 and 2011, we see that a breach of Rule 106 EPC was a sufficient ground for rejection in 7 out of 34 non-withdrawn petitions (R 3/11, R 7/11, R 17/10, R 1/10, R 6/10, R 7/10, R 9/09). In other words, appeal proceedings are no place for silent suffering; if you are unhappy with the way the proceedings are conducted, you should voice your concern and make sure it gets written down in the minutes.

Anders Hansson, European Patent Attorney

Playing the system: the annoyances of Russian utility models

Playing the system: the annoyances of Russian utility models

A fact: A Russian utility model must be new over all available written information. However, it is valid even if it relates to a product that was publicly available outside the Russian Federation at registration (Art. 1351, point 2, Civil Code).

A business recipe: New products are released on foreign markets. Pick one. Obtain a Russian utility model for the product. Be quick here – a patent application for the product is probably hiding somewhere and will be published within 18 months. Wait for the introduction of the product in Russia, and then let the owner know about your utility model …

The above is a flagrant abuse of intellectual property rights. But since the opportunity exists, there is always someone who will use it. This practice can in fact be observed rather frequently, as well-reputed colleagues have confirmed to us.

If your company regularly introduces new products on the Russian market, you may want to protect yourself against such frustration. Rather than going to court when presented with a fait accompli, it is probably cheaper in the long run to take the habit of creating prior art that invalidates potential utility models registered in bad faith. A published national Russian or Eurasian application (claiming priority from the first application that you file anyway) or a PCT application that has entered the national phase may be all you need to fight an annoying utility model. Whether your application leads to a patent does not matter, and you may withdraw it after publication to save costs.

Russian patent attorneys are aware of the problems associated with the present utility model legislation (see, e.g., 1, 2, 3). Many argue that public use outside Russia should also count as prior art. China made this law change in 2009. Recent achievements in search and translation technology should by far outweigh this extra burden on examining staff.

It is a pleasure to finish by referring the interested reader to the booklet “Patent System in Russia” (2010), which contains concise and up-to-date information on the subject.

Anders Hansson, European Patent Attorney, Awapatent

Software inventions: The BGH confirms examination approach

Software inventions: The BGH confirms examination approach

 

By its judgment in X ZR 121/09 (Webseitenanzeige), the German Federal Court of Justice (BGH) recently nullified one of Siemens AG’s German patents (English-language version) for lacking technical character. The judgment can be said to belong to the same lineage as Xa ZB 20/08 (Dynamische Dokumentengenerierung), which was reported in AWA IP Review 2/2010, and X ZB 22/07 (Steurungseinrichtung für Untersuchungsmodalitäten), on which Xa ZB 20/08 relied heavily.

This new judgment once more demonstrates the German two-step approach to determining whether an invention has technical character. The two-step approach is in contrast to current practice under the EPC, which regards technical character as a monolithic – and usually rather easy – requirement to satisfy. The new judgment (see point 15) stresses that the invention both

(i) should possess technicality (“Technizität”, referring to the wording of § 1(1) PatG, “Erfindungen auf allen Gebieten der Technik”), and
(ii) has to provide instructions for solving a concrete technical problem.

An invention failing condition (ii) will not escape the exception in § 1(3), point 3 PatG (“Pläne, Regeln und Verfahren für gedankliche Tätigkeiten, für Spiele oder für geschäftliche Tätigkeiten sowie Programme für Datenverarbeitungsanlagen”).

It is intriguing to note that these provisions, which proved fatal to the patent-in-suit, are word by word identical to Art. 52(1) and Art. 52(2)(c) EPC. What makes such differing interpretations possible – and what their impact may be – is discussed in more detail in the article in AWA IP Review 2/2010.

Siemens’ patent was about a method for organizing browsing history. This is a computer-implemented invention fulfilling the “Technizität” requirement (see point 16) but does not, in the Court’s view, go beyond the normal interactions between hardware and software in a computer to such an extent that it fulfils condition (ii) (see points 22–27). Indirect advantages – e.g., that a server executing the claimed method can allow computers with simpler hardware to connect (point 25) or that the total load on the Internet may decrease a trifle (point 30) – are not accepted as evidence of a concrete technical problem being solved. Indeed, they relate to devices outside the claimed subject-matter and do not form part of its results from an objective point of view.

Between the lines, the BGH points out the weaknesses that made the Court pass this judgment. Apparently, the application leaves the skilled person with little more than conceptual ideas for carrying out the claimed steps (point 27). Also, the method relies on user data being entered by the user him- or herself and not on measured – hence potentially technical – environment variables (point 28).

Considering, as we do, someone else’s patent in retrospect, these points can certainly be seen as “room for improvement”. Done right, they would have offered fallback positions that might have saved the patent. These points also reminds us that Siemens’ application was drafted in 2001, in the days before a stable European software practice had emerged. Today, I believe few patent attorneys in this field would feel comfortable filing an application that discloses the invention only on a conceptual level.

Since the European application EP02006122 in the family is still pending, the judgment offers an interesting opportunity to compare European practice with the patenting standards of Europe’s largest economy. While the BGH judgment makes explicit reference to the German law, the EPO may reach a similar conclusion, be it by other arguments.

Anders Hansson, Patent Attorney, Awapatent

Software piracy in China declining

A survey released by the State IP Office reveals that the percentage of pirated software installed on Chinese computers decreases for the fifth year in succession:

  • 2005: 66 %
  • 2006: 63 %
  • 2007: 56 %
  • 2008: 47 %
  • 2009: 45 %

The survey was based on 4,700 telephone interviews with consumers and business users carried out by Chinalabs.com. They estimate the 2009 value of the copied software to be 130 billion yuan.

A decline in copying is noted by the Business Software Alliance (BSA) too, although they arrive at the figure 80 %, down from 82 % last year and 86 % in 2005. BSA’s method is to predict the cost for supplying a country with legal software (yes, the model for this is very complex) and compare it with the value of the actual, paid-for software market. Measured on this scale, copied software installed in Denmark and Sweden amounts to 25 %. The USA is top of BSA’s list, at a mere 20 %.

Experts explain the decrease by a combination of the following:

  • Commercial suppliers, including Microsoft Corp., have lowered their prices in China specifically.
  • Legitimate free office programs and operating systems are improving and spreading.
  • By law, manufacturers may only install genuine operating systems in made-in-China computers. This entered into force in 2006.
  • The Chinese authorities are getting better at enforcing IP.

Other plausible factors are the emergence of domestic software suppliers and the rising IP awareness in China noted by many observers.

What is BSA anyway? It’s a non-profit trade organisation having as its mission to promote a safe and legal digital world. BSA was behind the 2008 lawsuit that put an end to the infamous Tomato Garden website. People downloaded not only unlicensed copies of commercial products, but also “improved” versions of MS Windows and others. Both are illegal under the copyright laws of China and virtually any country in the world, and both could be stopped.

Surely, you know that your software enjoys copyright protection from the moment you write it. But don’t forget – the successful action against the Tomato Garden was meticulously prepared as far as preservation of evidence was concerned. In order for your company to be ready to fight piracy the day it happens, there are a few measures to take. My colleagues and I will be glad to assist you.

Anders Hansson, Patent Attorney, Awapatent

Enforcement in the East II – Why should I patent in Russia?

This is a second blog post on patent enforcement in Eastern countries. Having already discussed China, we now turn to Russia.

Russia
Like China, Russia (pop. 142 million, GDP $1.676 trillion) has made great efforts to turn its IP law system into a market-oriented one, the latest amendment dating from 2008. Russia is a party to the Eurasian Patent Convention, through which patents can be granted in nine former Soviet republics.

At least on paper, the legislation should now qualify the country for WTO membership as regards the TRIPs criteria. The Russian government is providing further evidence of its good intentions by participating in bilateral work groups established to improving the country’s IPR protection, both with the European Union and the United States. Recently, Russia signed the WIPO Internet Treaties regarding electronic distribution of copyrighted media. There are dedicated patent courts as well as state-run arbitration (arbitrazh) courts for settling commercial disputes.

While Russia’s weak track record of protecting copyrights and registered trademarks means that the nation remains on the Priority Watch List of the United States Trade Representative, some improvements have been noted: for instance, the police have started to act against pirated music and movies sold in public places. No statement is made on the enforceability of patents.

Managing Intellectual Property notes that police actions based on penal-law provisions may not always be relied upon. Allegedly, it is sometimes more effective to fight IP abuse by suing the infringer in a civil court and petitioning for temporary injunctions for the duration of the litigation.

There are few up-to-date statistics available regarding the number of IP-related cases handled by the courts and the damages awarded. On the contrary, Russian courts regularly have their impartiality questioned in international media whenever one of the nation’s ‘oligarchs’ is on trial. Even so, it seems unlikely that an ordinary patent dispute would attract anywhere near the amount of political interest that these cases generate, and the simple fact remains that patent protection in Russia can only be provided by the award of a Russian patent. After all, some of the patents from the final days of the Iron Curtain era are still in force, and nobody knows what the next twenty years have in store.

Anders Hansson, Associate