Friday, May 24, 2013

Insurance method patent okay says IPONZ

In a decision published recently, the Intellectual Property Office of New Zealand (IPONZ) allowed a patent on a technique for providing data insurance.

It has been standard practice for some time to make periodic backup copies of stored data to mitigate financial and similar harm caused by data loss. However, there are some problems with existing techniques.

New Zealand patent 563320 recognises that costs are incurred in retrieving data from a remote location's backup copy and transferring it back to the original site. A further problem is where the backup copy may not be current, may have been damaged or corrupted, or may never have been created properly in the first place.

In Hodgkiss et al v Monument Insurance (NZ) Limited [2013] NZIPOPAT 8 (8 April 2013), the opponent Monument Insurance failed to persuade the Hearing Officer that the patent claims did not relate to an invention.

The patent claims

Claim 1 of the patent application reads as follows:
1. A computer-implemented method for providing data insurance, comprising: 
storing by a first processing device, data of a third entity on a storage medium of the third entity; 
creating an agreement between a first entity and a second entity to provide data protection service to a third entity, wherein the first entity arranges for a data protection service to be provided by the second entity for the third entity’s data stored on a storage medium of the third entity; 
creating an insurance agreement between the first entity and the third entity, because the data of the third entity was stored on the storage medium of the third entity, that authorizes the third entity to use the data protection service provided by the second entity for the third entity’s data stored on the storage medium of the third entity without charging the third entity for use of the data protection service provided by the second entity; 
storing, by a second processing device, an electronic backup copy of the third entity’s data, as required by the data protection service agreement, on a storage medium of the second entity such that the electronic backup copy of the third entity’s data stored on the storage medium of the second entity is insured against loss according to the insurance agreements; and 
upon loss of the data stored on the storage medium of the third entity, providing the backup copy of data from the second entity to the third entity in an attempt to restore the third entity’s data; and 
providing compensation from the first entity to the second entity for the data protection services.

Independent claims 12 and 22 are of a similar breadth, directed to a data loss mitigation tool and an insurance system respectively.

Is it an invention?

The Hearing Officer considered whether the invention claimed is a manner of manufacture within the definition of 'invention' in section 2 of the New Zealand Patents Act 1953.

The High Court of Australia in National Research Development Corporation v Commissioner of Patents ("NRDC") [1959] HCA 67; (1959) 102 CLR 252 (16 December 1959) established a patentability requirement of ‘a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the fields of economic endeavour’.

The Hearing Officer noted at [35] that Patent Office decisions in New Zealand have followed NRDC to:
allow many different claims to inventions which do not fall easily within the scope of the ordinary meaning of 'manufacture', including allowing claims to 'computer-implemented' methods in a number of applications.
The appropriate test, as set out in the Hughes Aircraft decision is:
...whether each of the claims define a method which, either directly or by clear implication, embodies a commercially useful effect.
The Hearing Officer referred to Haddad's Application which clarified that:
the term [manner of manufacture] still implies a situation which involves some sort of interaction with a real entity ... or which achieves a tangible product or result.
At [47] it was noted about the patent under consideration that:
there appears to be a resulting effect which appears to fall within guidance given by ... the Assistant Commissioner's decisions in Hughes Aircraft and Haddad.
A further point of interest was a response to one of the opponent's arguments. The opponent submitted at [43] that mere computer implementation of a contracting process cannot confer patentability, relying on the Cool 123 decision. That decision notes that: seems to me that it cannot be an 'invention' or 'manner of manufacture' to replace the previously conventional means (telephone, email or post) by the known SMS technology whose known properties or characteristics make it suitable for this use.
The Hearing Officer found at [44] that he wasn't persuaded that the present invention amounts to mere computerisation of a known process.

What next?

This invention was assessed under the current patent regime. There is currently a proposal to change New Zealand patent law to introduce a European-style "as such" restriction on the patentability of computer programs.

Under clause 10A of the proposed law a claim in a patent or an application relates to a computer program as such 'if the actual contribution made by the alleged invention lies solely in it being a computer program'.

So how would this invention be treated if it had been considered under the proposed law?

The Hearing Officer's comments give an interesting clue. The statement that this invention is more than a mere computerisation of a known process suggests that the actual contribution lies in more than just a computer program. It is therefore likely that this invention, and other inventions of this nature, would be patentable under the new law as well.

Tuesday, May 21, 2013

Maintaining a global patent portfolio

GlobeBuilding a strategic patent portfolio requires tough decisions to be made all the time. In which countries do I file patent applications? Which patent applications should I abandon? Which issued patents should I maintain?

In a previous post I outlined one corporate strategy. You view country selections as a set of buckets that are grouped to define the different business approaches to the countries in each bucket.

Another corporate approach is to apply tools from optimisation theory to patent lifecycle decisions. There are four specific factors that must be considered in order to optimise a patent portfolio across various countries. These are:
  • geographic importance
  • strength of the existing portfolio
  • diversity across technology areas
  • filing/management costs.

Each of these factors are assigned specific parameters or weights that are then used as inputs to an optimisation model.

Importance of geographic region

Factors to consider within a geographic region are the proliferation of relevant products, strength of the IP regime, and regional holes.

A patent applicant should seek protection in countries most relevant to its products and technologies. It is therefore important to file patent applications in all geographic regions where infringing products are made, used or sold.

In order to prioritise individual countries it is important to consider:
  • expected revenue in a country for the relevant products;
  • whether a country is a major manufacturing centre for relevant products;
  • whether a country is an import/export centre for relevant products.

The strength of the IP regime within each country is important. There is more value in securing patent protection in a country with a strong IP regime than securing patent protection in a country with a weaker regime.

There are a few ranking engines around that rank IP regimes of various countries based on factors such as legal enforcement, judiciary independence, average length of litigation, and so on. Examples include the Global Intellectual Property Index (GIPI) and the Intellectual Property Rights Index (IPRI).

Another factor in country selection is whether a country is helping a company fill a gap in a particular region where it has no protection otherwise. These gaps are known as regional holes.

Countries are assigned relative weights to reflect relative importance in the above areas.

Strength of the existing portfolio

It's important to consider the strength, in the sense of size and value, of the portfolio that already exists in a jurisdiction. Consider a case where a company has many patents in Country A but only a few in Country B. The marginal value of an additional patent filed in Country B is potentially higher than in Country A.

Diversity across technology areas

The most fundamental and valuable inventions in any given technology area are typically protected early on. Different elements of the technology are invented as the technology evolves. Companies need to recognise such trends and ensure there are no time gaps in their portfolio holdings for any technology area.

Cost of obtaining patents

The cost of obtaining patents varies across countries, although the cost does tend to follow the same general pattern. There is the initial cost of preparing the patent specification. Following initial drafting, there are the following cost steps in each country:
  • Filing - cost of filing the application including professional fees, Patent Office fees and translation costs
  • Prosecution - cost associated with examination reports that must be dealt with to secure grant.
  • Granting - cost payable to Patent Office for granting a patent
  • Annuities - fees paid to Patent Offices periodically to keep a patent or patent application alive

In most countries the cost of prosecution is much higher than during any other phase in the patent's lifetime. This is also the time when the uncertainty associated with a patent's value is also the highest. The prosecution stage is a good time to assess whether continuing with a patent application in a given country is worthwhile.

The optimisation model

Having considered and assigned weights to geographic importance, strength of the existing portfolio, diversity across technology areas and filing/management costs, a company is then in a position to formulate and solve an optimisation problem.

Each company will have its own optimisation model. However this is defined, the process provides a company with a rational and objective approach to the strategic management of patent portfolios.

Photo courtesy of author Benjamin Bunch under Creative Commons licence.
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