Posts by: Magnus Nilsson | (6) posts

In the field of distributed computing, user devices with limited computing power may be connected to a remote computing system where the main purpose of the user device is to receive commands from the user and to display processed data provided by the remote computing system. The main computational processing takes place at the remote computing system, typically formed by a “cloud” of network-connected computer resources. As the computational processing is shifted from the user device to the remote computing system, it is possible to provide the user with computing services that are typically not available in a stand-alone user device due to factors such as cost, computational power and licensing issues. This provides an opportunity to completely rethink how and where to place your company’s computing resources. It also allows you to decide whether you should upgrade your internal servers or outsource the computational power and storage to an external provider.

Accordingly, a new service-based business model is made available, which however introduces problems in regards to how to handle the intellectual property of the software providing the service. The main concern typically relates to the possibility of geographically positioning the servers in another country than in which the user is active. Geographical distribution of for example patented software, in different countries and jurisdictions put an undesirable spin on the enforceability of patent rights. It is easy to see how this could potentially allow a wilful infringer to position servers in a country or jurisdiction that provides good bandwidth and accessibility, but where no patent rights are enforceable.

However, based on fairly recent case law (e.g. Football Dataco & others v Sportradar GmbH & another (Case C-173/11) as well as NTP, Inc. v. Research-in-Motion, Ltd. (RIM), 418 F.3d 1282, 75 U.S.P.Q.2d 1763 (Fed. Cir. 2005)), it has been made clear that the courts generally try to look to where the beneficial use of the invention is obtained. This provides at least some relief in view of the above identified geographical disparity between servers running patented software and the possibility of patent enforcement.

This is however only half of the truth. The fact is that the courts (i.e. in relation to the RIM case) prefer to look at patent infringement from a “system” perspective, i.e. where the beneficial use of a system may be obtained even though servers are placed in one country and the users in another. It is a different story with method claims where it for example has been determined that each step of the process must be performed within the same country (i.e. the USA) in order to be seen as infringing.

Based on the above, care must thus be taken in crafting your intellectual property strategy when deciding to protect, for example, new computational and/or social media related software-based methods having the possibility to be executed within the cloud, where geographical disparity between user devices and the computing system is apparent. Obviously, it is of great importance to conduct a general review of the possibility of including patent claims from all different perspectives (providing they are considered patentable). This means including both device and method claims drafted from the perspective of the different computing nodes, the system including both the computing node(s) and the user device, as well as from the perspective of the user/user device.

In addition, the choice of where to file patent applications may differ slightly from the normal filing strategy (where filing a patent application in the USA is typically the first priority for software related inventions). Accordingly, it may be a good idea to also consider filing patent applications in countries where it may be suitable to place computer servers.  An example of such a country is Sweden, where for example Facebook at present builds a 28 000 m2 server farm, their first outside of the USA. The reason for placing the server farm in Sweden is in this case due to the high reliability in regards to electricity and network connectivity.

To summarize, achieving a desired level of patent protection for cloud-based inventions is more complicated than for a physical object where the provision (manufacture and/or sale) of the object as well as the use generally take place in a single jurisdiction at any given time. The same, of course, applies where all steps of a patented method are performed by a single user in a single location. It is therefore essential to review your intellectual property strategy taking into account possibilities with regard to claim construction as well as the choice of countries in which to file patent applications.

Magnus Nilsson, European Patent Attorney

The dispute between Apple and Samsung on smartphones and tablets has received much public attention. Recently, a landmark verdict was reached when a California based court decided in Apple’s favour. Samsung now has to pay at least one billion US dollars to Apple, who also has sought a sales ban in the USA on a number of the Samsung products involved.  A preliminary injunction hearing is scheduled on September 20, 2012.

The court held that Samsung had infringed several of Apple’s utility patents for user interface related functions in both smartphones and tablets, including one utility patent relating to the now well known “bounce-back feature”. However, what is more interesting; the court considered that Samsung had infringed a number of design patents, for example relating to the appearance of the physical device as well as the design of its graphical user interface. This kind of intellectual property dispute normally tends to be dominated by technical patent issues, thus it’s an interesting and exciting development to see that protection of design has had such a great impact on the court’s decision.

Evidence in the court proceedings included an email from Google to Samsung, pointing towards that Samsung’s “P1” and “P3” tablets (Galaxy Tab and Galaxy Tab 10.1) were “too similar” to the iPad and demanding “distinguishable design vis-à-vis the iPad for the P3”. Additionally, Apple presented an internal Samsung technical development report where Samsung’s team of engineers compared the Samsung prototype with an iPhone.

So, is this the end for Samsung’s Android based smartphones? Most likely not. It should be fairly easy for Samsung’s engineers to design around Apple’s patents and design protection, however at the cost of losing some of the features nowadays generally expected when buying a Samsung smartphone. In any case, we may see a shift from Android based smartphones towards the use of the Windows Phone operating system. This is most likely well received by Microsoft, having a planned release of Windows Phone 8 later this year.

Magnus Nilsson, European Patent Attorney

Further to our information relating to the Taiwanese Trademark Act, the Legislative Yuan on November 29, 2011, passed the draft amendment to the Patent Act proposed by the Executive Yuan. The date on which this Act takes effect will be decided by the Executive Yuan. It is estimated this Act will come into force one year after ratification of the President.

The main points further improving the Taiwanese patent system are summarized below. 

1. The applicant can claim a grace period of six months prior to the filing date, due to own disclosure through printed publication.
2. It will be possible to apply for reinstatement if the applicant unintentionally failed to claim priority, pay issue fee, or pay annuity fee within the statutory time.
3. The applicant may file a divisional application within 30 days from when the notice of allowance is rendered.
4. It will be possible to apply for a compulsory license to produce pharmaceuticals and export them to developing countries to solve their public health problems.
5. Additionally, it will be possible for an applicant to file an invention patent application and a utility model application at the same time. However, TIPO will ask the applicant to select one of the applications when the patent application is allowed, and the unselected one does not exist ab initio.

The amendment to the Patent Act is aimed at encouraging and protecting inventions and creations in order to promote the development of various industries. This includes the encouragement of invention patents, utility model patents and design patents.

Magnus Nilsson, European Patent Attorney

On January 13, 2009 the United States Court of Appeals for the Federal Circuit (CAFC) published an amended decision in the Comiskey case, revising its original decision from 2007. The Comiskey patent application claims a method and system for mandatory arbitration involving legal documents such as wills or contracts.

In the original decision the CAFC considered the method to be an abstract idea (processes of human thinking) and thus not patentable subject matter under 35 U.S.C. §101. The system, which generally describes the same process but includes a plurality of “modules”, was on the other hand considered patentable subject matter based on the addition of the modules. However, the CAFC regarded the modules to be a routine addition of modern electronics to an otherwise unpatentable invention, thus creating a prima facie case of obviousness.

Consequently, the USPTO was remanded to determine whether the mere addition of modern computers and communication devices would be obvious, not taking into account the system as a whole but only the actual system modules. This separation of the system between the process steps and the system module when considering obviousness (35 U.S.C. §103) created uncertainty regarding if computer implemented business methods, such as in the area of e-commerce, would be considered patentable.

However, in the revised decision the CAFC applies a more liberal interpretation of the system modules, thereby opening up for the Comiskey system to be seen as a specialized machine implementation that taken as a whole including the process steps and the functionality of the system modules could be patentable under §101. On the other hand, the CAFC did not make any judgment as to whether the system should be considered patentable under §101, but rather once again leave that to the USPTO to decide.

As a result, the case has been remanded back to the USPTO for determining whether §101 is satisfied. In its future decision the USPTO will possibly consider the recent Bilski decision for determining if the system according to Comiskey passes the machine-or-transformation test.

If you would like to read the revised Comiskey decision it can be found here.

Magnus Nilsson, Patent Attorney and member of the Awapatent software team

Yesterday (October 30, 2008), United States Court of Appeals for the Federal Circuit (CAFC) closed the door on the State Street Bank decision from 1998, a decision stating that it would be enough in regards to patentability under 35 U.S.C. § 101 if an invention produces “useful, concrete, and tangible result”.

In the decision from yesterday, the CAFC instead made use of the so called machine-or-transformation test, where either a specific machine with specific ties to the claimed process or the specific transformation of a physical entity to another must be present for the invention to be patentable. Thus, an invention, such as the Bernie Bilski invention, which is not tied to any specific machine or apparatus for any of its process steps nor is limited to any particular transformation, is not patentable.

The machine-or-transformation test has been applied before, for example in relation to Gottschalk v. Benson (1972). However, in the Gottschalk v. Benson case, the claimed process was still held to be ineligible subject matter, even though it operated on a machine such as a digital computer, since the claim’s tie to the machine were not specific enough. Accordingly, an algorithm implemented on a general purpose computer, such as a PC, was in this case not enough for reaching patentability.

On the other hand, a case where the court ruled the machine to be specific enough when applying the machine-or-transformation test, was in relation to Diamond v. Diehr (1981), where the Arrhenius equation was used for deciding when a process for curing rubber in a mould was completed. In this case, the machine had means for both the curing of the rubber as well as the computation of the Arrhenius equation (i.e. means for installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the Arrhenius equation and a digital computer, and automatically opening the press at the proper time).

Accordingly, for not failing the machine-or-transformation test it seems that one has to be very specific when drafting an application in this area, such that the ties between a claimed process implemented on a machine are made obvious.

On the positive side the CAFC noted that there will be no implementation of the so-called “business method exception” (as well as in relation to software), which they rather state would be unlawful. Accordingly, business method and software claims are still in as long as they fulfil the machine-or-transformation test.

If you would like to read the whole decision it can be found here: http://www.cafc.uscourts.gov/opinions/07-1130.pdf.
Magnus Nilsson, European Patent Attorney

It all started in the late 90’s with the State Street Bank decision (State Street Bank & Trust Company v. Signature Financial Group, Inc.) by the United States Court of Appeals for the Federal Circuit (CAFC) broadening the inventive area and thus opening up a flood of business and financially related method patents in the US. After that point, we have seen numerous patent and patent applications for banks, financial institutions and companies like IBM Inc., eBay Inc. and Amazon Inc, relating to on-line bidding, customer relationship management, portfolio handling and so on, together rendering a value of many billions of dollars. However, it looks like the CAFC once again will re-define what may be called an invention, possibly this time decreasing the patentable area and killing the US saying “it is possible to patent anything under the sun made by man”. 

The current trend at the United States Patent and Trademark Office (USPTO) is to tighten up what may be granted in relation to both business method and computer related inventions, e.g. In re Nuijten relating to “encoding to computer signals” and In re Comiskey relating to a business method. The most current case relates to a patent application by Bernie Bilski, which involves claims to a method of managing the risk of bad weather through commodities trading. According to the USPTO the problem is that the wording of the Bilski claims does not include any particular form of technology, e.g. it does not involve any form of computer or storage media, and may thus be seen solely a “mental method” which by the opinion of the USPTO is non-patentable. The case has therefore been forwarded to the CAFC who have to decide if an invention must involve some practical application and if a pure business method really produces “a useful, concrete and tangible result”.

The forthcoming decision was briefly discussed on September 9, 2008 at the AIPPI 41st World Intellectual Property Congress in Boston where Chief Judge Paul Michel of the CAFC said that he expects the Bilski decision to be issued within one to two months. Consequently, we may hopefully expect a publication of the decision no later than early November this year.

As a result and with the present uncertainty, it is necessary (as is well known by all attorneys working in the European jurisdiction) to draft “robust” specifications, and include various embodiments that specify the use of e.g. machines for performing “processing steps”, or demonstrate physical process steps that transform one physical entity into another, thus making the invention concrete and tangible.

Consequently, be prepared for some changes in the US legislation which may have impact on both business method and computer related inventions, and please check back soon – we promise to keep you posted on the forthcoming process.

Magnus Nilsson, Patent Attorney