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PTO provides examiners with guidance on software patents in light of U.S. SC ruling

By Jessica M. Karmasek | Jul 22, 2014

WASHINGTON (Legal Newsline) - The U.S. Patent and Trademark Office recently provided its examiners with guidance on software patents following a U.S. Supreme Court decision last month that ruled some software method and systems patents are invalid.

And one patent attorney says the PTO's guidance is good for the software industry.

"It provides meaningful instructions for drafting patent eligible inventions," explained Jacob Baron, a member of Holland & Knight's Intellectual Property Practice Group.

The PTO's Deputy Commissioner for Patent Examination Policy, Andrew Hirshfeld, issued a four-page memorandum to all patent examining corps June 25.

In it, Hirshfeld pointed out there is no new category of innovation that is patent ineligible. Also, he noted, there are no new eligibility requirements for either software or business methods.

Click here to read the complete memo.

"The Patent Office has now made it clear that any claim involving any of the three exceptions to patentability -- law of nature, natural phenomena or abstract idea -- should be analyzed under the Mayo v. Prometheus standard," said Baron, whose practice is focused on intellectual property litigation, portfolio development, counseling and strategic advice.

"This supersedes the PTO's previous instructions stating that abstract ideas should be analyzed under the Bilski (v. Kappos) analysis."

Baron continued, "Importantly, the PTO's instructions state that the Alice decision neither creates a per se category of unpatentable subject matter for either software or business methods."

In its June 19 ruling, the Supreme Court said the claims in Alice Corporation Pty. Ltd. v. CLS Bank International and CLS Services Ltd. were drawn to an abstract idea.

Implementing those claims on a computer was not enough to transform the idea to a patentable invention, the justices ruled.

CLS originally sued Alice in the U.S. District Court for the District of Columbia in 2007, seeking a declaratory judgment that Alice's patents were invalid and unenforceable and that the bank did not infringe them.

Alice, which countersued, claimed CLS started using their technology in 2002.

Alice asserted four patents -- U.S. Patent Nos. 5,970,479; 6,912,510; 7,149,720; and 7,725,375 -- against CLS, all on electronic methods and computer programs for financial-trading systems.

Last year, the U.S. Court of Appeals for the Federal Circuit -- which handles all U.S. patent appeals -- ruled 7-3 against patent eligibility of the method claims and 5-5 on the system claims, leaving a lower court's ruling that the system claims were ineligible in place.

The Supreme Court's opinion affirmed that ruling, again deeming all of Alice's claims ineligible.

Though the high court's decision provides very little to no legal guidance to lower courts on how to decide if a computer-generated technology is patentable, it does provide some level of certainty for those who generate computer software.

"Software inventions that include an 'inventive step' are patentable. Computerized processes that merely use a computer to implement an abstract idea, without the addition of an inventive step, are not patentable," Baron explained.

The PTO's memo, in light of the ruling, also should be seen as a positive for the software industry, Baron said.

"It allows companies to protect their intellectual property investments in truly inventive Information Age technology while providing examiners with a framework to weed out weak patents that simply add a computer to well-known processes from the financial and business world (business method patents)," he said.

From Legal Newsline: Reach Jessica Karmasek at

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