Monday, September 15, 2014

Signposts for software patents

pay heed The New Zealand Patents Act 2013 came into force today. Less than a week before the General Election I wasn't expecting a lot of fanfare. But there has been a lot of work done getting ready.

As the Patents Bill worked its way through the legislative process, one of the hotly debated topics was the extent to which patent protection should be available for computer-implemented inventions. These are also referred to as software patents.

So the new law is in place. What now? As I said in New Zealand bans patents for software, it's a little unclear. Have we banned software patents? Or have we banned patents for software? There is a difference.

The old law

Patent applications filed up to and including Friday 12 September will be assessed under the Patents Act 1953 (the old act). Future divisional applications and continuations, filed from those applications, will also be assessed under the old act.

The old act defines an invention as any 'manner of new manufacture'. What is patentable subject matter and what is not patentable subject matter is defined by case law and decisions of the Commissioner of Patents.

The new law

IPONZ will now look more closely at 'any claimed invention that involves or is implemented by a program running on some sort of computer'. It says so in the Patent Examination Manual published today.

Patent applications subject to the Patents Act 2013 (the new act) will still have to satisfy the 'manner of new manufacture' test. There will also be a test applied to determine whether a patent claim relates to a computer program as such. This will occur if the actual contribution made by the alleged invention lies solely in it being a computer program.

Is the contribution a computer program as such?

The Minister responsible for the new legislation gave a clear direction to the Commissioner of Patents and the New Zealand courts to apply the steps of the Aerotel test established by the English Court of Appeal. The Minister intends New Zealand practice to follow the Aerotel test, and subsequent English jurisprudence that applies the test, when considering patent applications involving computer programs.

The Patent Examination Manual refers to five 'signposts' that would indicate patentable subject matter. These five signposts were formulated in AT&T Knowledge Ventures LP, Re [2009] EWHC 343 (Pat) as:
  1. whether the claimed technical effect has a technical effect on a process which is carried on outside the computer;
  2. whether the claimed technical effect operates at the level of the architecture of the computer; that is to say whether the effect is produced irrespective of the data being processed or the applications being run;
  3. whether the claimed technical effect results in the computer being made to operate in a new way;
  4. whether there is an increase in the speed or reliability of the computer;
  5. whether the perceived problem is overcome by the claimed invention as opposed to merely being circumvented.

These signposts represent 'easy wins'. If a claimed invention satisfies one of these tests then it is likely to be eligible for patent protection under the new law. So we are now a little clearer as to how IPONZ is going to handle these types of inventions. What will help a lot is some assistance from the Courts.

Photo courtesy of author Tom under Creative Commons licence.

Friday, June 20, 2014

US Court says no to patent on computer-implemented business method

delete, accept, and deny cookiesThe United States Supreme Court has handed down a decision that is important for all business method patent applicants. In Alice Corporation Pty. Ltd. v CLS Bank International et al the Court held that use of a generic computer does not transform an abstract idea into a patent-eligible invention.

Alice Corporation is the owner of several patents covering a business method for mitigating settlement risk. This settlement risk is the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. The claimed invention used a computer system as a third-party intermediary.

The Mayo test

The Court affirmed what it called a 'framework' from Mayo Collaborative Services v Prometheus Laboratories, Inc. It is supposed to distinguish patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.

It involves:

  1. determining whether the claims are directed to a concept that is not patent eligible; and
  2. if so, determining whether any additional elements in the claims 'transform' the nature of the claims into a patent-eligible invention.

What is not patent-eligible?

The Court held that the claims were drawn to the abstract idea of intermediated settlement, the use of a third-party to mitigate settlement risk. The Court referred to Bilski v Kappos in which the Supreme Court rejected a method for hedging against the financial risk of price fluctuations.

Apparently the concept of intermediated settlement is a fundamental economic practice long prevalent in the United States system of commerce.

Alice Corporation tried to argue that the abstract ideas category is confined to preexisting, fundamental truths that exist in principle apart from any human action. The Court didn't accept that argument.

What else do you need to transform a claim?

The Court considered whether there was anything else in the claims to transform them into a patent-eligible application. The answer was no. The method claims merely required generic computer implementation and therefore failed to transform the abstract idea into a patent-eligible invention.

So what exactly does an applicant need to transform a claim? The judgement does not give clear guidance on this point. It is up to the Federal Circuit Courts to clarify these lofty directives.

There are some clues though. The decision says that the method claims do not purport to improve the functioning of the computer itself. Nor do they effect an improvement in any other technology or technical field. So it is likely that additional elements in a claim that do that will be helpful.

Could it be that we are going to see a technical effect requirement similar to Europe?

The draughtsman's art

Something else that was interesting about this case is that the Court did not distinguish between the method claims, the system claims and the computer-readable medium claims. It rejected them all.

The system and media claims were held to add nothing of substance to the underlying abstract idea in the method claims and were therefore held to be patent ineligible.

The Court reaffirmed several times that patent eligibility does not depend simply on the draughtsman's art. Putting this another way, the law of patentable subject matter is not 'like a nose of wax which may be turned and twisted in any direction'. I love the idea of my work being considered art.

The way forward

It is clear that computer-implemented inventions based on abstract ideas are not patentable in the United States. It is equally clear that mere generic computer implementation is not a cure. However, a technical effect in a claim is likely to get it over the line.

Photo courtesy of author stallio under Creative Commons licence.

Monday, March 31, 2014

Another look at crowd sourcing

sequoia washing his mom's car - _MG_4393.embedThe United States Patent and Trademark Office (USPTO) is hosting a roundtable event on the use of crowdsourcing to identify relevant prior art. The USPTO wants to improve the quality and increase the quality of third party submissions.


The USPTO has been collecting ideas from the software community via the Software Partnership to enhance the quality of software-related patents. In response, the public has proposed crowdsourcing as a technique to expand the prior art available to examiners. The White House also said it was a good idea back in February in a list of executive actions.

Crowdsourcing is the act of 'taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call.'

The USPTO believes that crowdsourcing has the potential to help examiners in certain technology areas, such as software, where information that resides within the technical community is often not readily available to examiners. Third parties are able to submit relevant prior art publications and concise description of relevance to patent examiners.

Topics for written comments

The specific questions the USPTO wants answers to are:
  1. How can the USPTO leverage the collective knowledge available via crowdsourcing to provide an examiner with relevant prior art?

  2. What suggestions do you have for the USPTO to encourage more third-party submissions from the scientific and technical community via crowdsourcing activities?

  3. Aside from encouraging more third party submissions, what are other ways the USPTO can leverage crowdsourcing to get relevant information from experts in the scientific and technical community to the examiner?

  4. How can the USPTO encourage more third-party participation while ensuring that no protest or other form of pre-issuance opposition to the grant of a patent on an application is initiated after publication of the application?

  5. What, if anything, is preventing you from submitting prior art as part of a third-party submission?

  6. What other ideas do you have to ensure examiners have the most relevant prior art in front of them during examination?

A thorny thicket

Crowdsourcing is not a revolutionary concept for locating prior art. Back in 2000 there was the high profile launch of, a self-described 'patent-busting' website. Companies wanting a patent busted submitted a fee and a bounty. Bounty hunters emerged from the crowd seeking a bounty for submitting a document matching the requirements of a bounty posting.

Shortly after the launch of BountyQuest there was an interview with a co-founder on its demise. He suggested that:
'the patent mess is a thorny thicket that doesn't lend itself well to penetration by amateurs. I know that when we did the bounties on the Amazon 1-click patent, there were numerous people who sent in what they thought was important prior art, but which the attorneys who reviewed it didn't find useful'.

The problems with crowdsourcing

I recently attended a conference where a director of a professional search company pointed out some of the flaws with crowdsourcing. Okay, so his presentation might have had a marketing slant. But a lot of his points made sense:
  • True 'experts' are very busy individuals who value their time. They prefer to devote leisure time to family and friends rather than pursuing prior art.

  • Crowdsourcing attracts many individuals who are neither search specialists nor 'technical experts'. The result is an extensive body of prior art that fails to match the patent claims.

  • Amateurs tend to search areas they are familiar with, rather than the body of art most critical for each technology.

  • Professional search firms pay high fees for multi-lingual well-indexed databases. The crowd relies heavily on internet searching which is 'woefully inadequate'.

  • Search efforts are uncoordinated with few searchers willing to devote significant time for low reward. Search efforts tend to be duplicative, with various individuals pursuing the same low hanging fruit.

  • Patents don't lend themselves to searching by amateurs. What they think is important prior art is not actually useful.

Further steps

The roundtable event will be held at the USTPO in Alexandria on 4 April 2014. Written comments are due by 25 April 2014. It will be interesting to see what comes out of it. Is the lack of interest in third party submissions perfectly understandable given the failure of BountyQuest?

My personal view is that we should encourage the public to submit what they believe to be relevant prior art, even if the prior art is junk. It builds stakeholder engagement if the public feel they are involved. It also provides a useful hobby for vocal critics of patent quality.

However,  I don't think the USPTO (or any other Patent Office) should rely solely on crowdsourced prior art during the examination process.

Photo courtesy of author sean dreilinger under Creative Commons licence.

Tuesday, January 21, 2014

Twenty years on

Last week I passed a significant milestone. I've now been an intellectual property advisor for twenty years. I think that entitles me to dwell a bit on how things used to be and how they are now.


One of the biggest changes over the last twenty years has got to be our use of technology.

Back in 1994 I had a single cathode ray tube (CRT) screen connected to a mainframe in a server room. The 'computer' was used only for accessing the firm's electronic docketing and record system. It had been written in-house and was pretty state of the art back then.

On my first day the server was down. As I was being shown around I remember seeing the computer guy in the server room. Shirt sleeves rolled up. Red faced. Looking stressed. I thought back to my recent career choice to create stuff rather than fix stuff. If ever there was a defining moment that I had made the right choice then this was it.

There were no cellphones, no smart phones, no tablets. There was internet access from a single stand-alone PC running Mosaic. We had a telex machine. We eventually encouraged clients who still sent us telexes to send urgent instructions by fax instead.

Today our firm has a Bring Your Own Device (BYOD) policy. A bewildering selection of powerful mobile devices combined with secure, web-based technology means that our attorneys are able to work from virtually anywhere.

Patentable subject matter

We have seen a gradual widening of eligible subject matter, particularly in my field. The Hughes decision in 1995 is acknowledged as a landmark case in the treatment of computer-related inventions. We were able to point to an earlier Australian decision which the new Zealand Hearing Officer adopted the test for eligible subject matter as:

'Does the invention claimed involve the production of some commercially useful effect?'.
The Haddad decision in 2000 reminded us 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.

Surge Miyawaki in 2005 involved a method of issuing an ear tag to identify an animal in a group of animals. The applicant averted a challenge by amending the claims to include a computer database. 

The Hearing Officer in two separate applications Coppereye and Maximum Availability in 2006 concluded that a database per se can be considered as analogous to a table or spreadsheet in which data is arranged in a manner which facilitates searching and information retrieval. Claims to the database were refused.

These two decisions are at odds with the later Microsoft decision in 2007 in which a patentable data structure arranged and presented data in such a way that it worked in cooperation with a computer program to produce an improved and commercially useful result.

In 2007 the first New Zealand Court decision on the patentability of business methods, Cool 123, noted that a business method could be the subject of a patent application. However, where the case for obviousness seems overwhelming it is difficult to find eligible subject matter.

In 2013 IPONZ allowed a patent on a technique for providing data insurance in Hodgkiss v Monument Insurance. The Hearing Officer commented that the invention was more than a mere computerization of a known process, which suggests that the actual contribution lay in more than just a computer program.


Long before its relaunch as the Intellectual Property Office of New Zealand (IPONZ), the New Zealand Patent Office operated out of a six story building 15 minutes drive out of the Wellington CBD. It shared a car park with a funeral parlor and was a mere stone's throw from both a liquor store and a fast food franchise.

Patent Office staff prepared abstracts of all allowed patents and printed them on cards the size of envelopes. There were stored in IPC order. Searching consisted of identifying a set of catch words describing an invention from a hard cover book, looking up the relevant IPC classes, and flicking through the cards in the relevant classes. I remember a sign displayed prominently above the cards warning us that a misplaced card could cost a million dollars.

My firm had 5 full time staff working out of space provided by the New Zealand Patent Office in its library. We would send search instructions out to our staff by morning courier. They would send us back search results that afternoon. I was there when we installed a fax machine at the Patent Office for our searchers to use.

Exam reports were largely handwritten, at least for trade mark cases. The Patent Office had a kind of form listing every possible rejection an examiner could raise against a case. Examiners simply worked their way down the form and checked most of the boxes.

There was a late filing box. It was a kind of slot through which you could post paper documents. Every morning Patent Office staff scooped up everything posted in the slot the day before and stamped it with yesterday's filing date. There was supposed to be an automatic gate on the slot that closed the slot at midnight. Nobody wanted to test whether or not the gate technology worked. And so began the tradition of late night dashes to the late filing box.

Legislative changes

Right now we are waiting for the New Zealand Patents Act 2013 to come into force in September. Prior to that there were only relatively minor tweaks made to the New Zealand Patents Act 1953.

The Patents Amendment Act 1992 had recently enabled New Zealand to join the PCT system. The Patents Amendment Act 1994 increased patent term from 16 years to 20 years. It also removed an obscure ground of rejection for perpetual motion machines. The Patents Amendment Act 1999 broadened the definition of 'convention country'. And then there was the Patents Amendment Act 2002, which allowed 'springboarding' for the benefit of generic pharmaceuticals manufacturers.

In the late 90s the Trans-Tasman Mutual Recognition Act 1997 and the equivalent legislation in Australia recognized the role of patent attorney in each country as equivalent occupations. Registered patent attorneys in New Zealand could now apply for registration in Australia and vice versa.

What now?

It's hard to predict what the profession will look like in another 20 years. A lot will depend on the types of inventions our clients come up with, the legislative framework we operate under, and the technology we use to help us advise our clients. None of which is likely to even remotely resemble what we have today.

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