patents & patentability: what you need to know to ask the right questions presented by: amster...
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Patents & Patentability: What You Need to Know
to Ask the Right Questions
Presented by:
AMSTERROTHSTEIN& EBENSTEIN LLP
Anthony F. Lo CiceroAmster Rothstein & Ebenstein, LLP90 Park AvenueNew York, NY 10016212-336-8000alocicero@arelaw.com
Lisa S. MankofskyFoley & Lardner LLP3000 K St., N.W.Suite 600Washington, D.C. 20007202-672-5384lmankofsky@foley.com
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What is a patent?
A patent is – a limited right – granted by the U.S. (or
other) government – to exclude others from
practicing an invention.
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What is a patent?
Applies to – the first and true inventors of – a new, not obvious and useful
development– in exchange for the public
disclosure of the invention.
Lasts for 20 years from filing date
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What rights flow from a patent?
• A patent is a right to exclude others from practicing the claimed invention.
– Does not guarantee that the patent owner can practice the invention, only that others can not.
• The patent owner is entitled to at least some compensation if other companies infringe.
• The patent owner may be entitled to injunctive relief.
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What is an invention?
• An “invention” occurs when there is a “conception” and “reduction to practice.”– Conception is the mental part. Coming up
with the idea.– Reduction to practice is actually making the
invention. • Filing of an application is considered a type of
reduction to practice.
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Who is an inventor?
• An inventor is one who contributed to the conception of an invention claimed in one or more of the claims of the patent.
• One who merely acts as the “hands” of an inventor is not an inventor.
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What are the criteria for patentability?
• Novelty
• Utility
• Non obviousness
• Patentable subject matter
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Novelty
No single reference has all of the elements of the claim.
What is claimed:
1. A widget having:
A
B
C and
D
Prior Art 1 A widget having
A and B.
Prior Art 2
A widget having A and C.
Prior Art 3 A widget having
A, B, C and D.XNot novel
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Non obviousness
It would not have been obvious to one of ordinary skill in the art.
Obviousness is typically determined by combining references:
pencil + eraser = pencil with eraser
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What is patentable subject matter?
“Process” – acts or series of acts
“Machine” – concrete structure
“Manufacture” – some tangible article or commodity
“Composition of matter” – two or more substances
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What is prior art?
– “known or used by others” in the U.S. before the invention
– Published or patented by others before the invention
– Published or patented by anyone more than one year before the earliest effective filing date
– On sale or offered for sale in the U.S. more than one year before the earliest effective filing date
– In public use or display more than one year before the earliest effective filing date
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How is a patent obtained?
18 monthsIDS,Paper work
PCT & Non-U.S. Filings
U.S. Publication
PCT – National Filings
Conceive Invention Patent
SearchFile Pat. App. with USPTO
PrepareInvention Disclosure
Draft and Revise Patent Application
Pre-filing Activities
Filing Date
U.S. Prosecution
Office Actions and Responses
U.S. Patent Issues
1 year
30 mos.
PCT Prosecution
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Patentability Requirements
• Found at 35 U.S.C.– § 101 – Subject Matter/Utility– § 102 – Novelty– § 103 – Non-Obviousness– § 112 – Adequate Disclosure
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Why Seek a Patent?1. To protect and enhance market share2. To protect technology that creates a key differentiator from
competitors3. To protect investments in R&D, and prevent others from copying4. To prevent others from patenting your technology and exploiting
it5. To license your invention to others, and thereby generate
licensing revenues6. To generate value through patent infringement litigation7. To have bargaining chips for cross licensing and for avoiding
patent infringement litigation8. To create assets that can be bought and sold and thereby
increase your company’s value overall
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Why Is Patent Eligible Subject Matter a Controversial Topic?
The Issue:
This has a major impact on some industries because it affects very important business concerns such aso Protecting and increasing market shareo Protecting R&D investmentso Increasing licensing revenue, and o Incurring litigation costs or increasing revenue brought in
from litigation
Whether there should be a broad scope of eligibility confirmed
Whether there should be a broad scope of eligibility confirmed
Whether there should be a narrow scope of eligibility, thereby closing off some patent protection
Whether there should be a narrow scope of eligibility, thereby closing off some patent protection
OR
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Why Is Patent Eligible Subject Matter a Controversial Topic?
• Huge jury awards and settlements in patent infringement litigation have brought patents to the forefront in many industries, especially involving high tech companies and computer software
• NPEs – Non–Practicing Entities
– Entities that do not use the inventions they have patented
– Typically assert patents for purely financial gain
– NPEs are playing a major role in the debate
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The Debate: Broad vs. Narrow Protection
• Those Arguing for a Broad Scope of Patent Protection– Argument: Broad protection is needed to promote
innovation and competition– Examples of companies making this argument are:
• Startups that use patents to build and protect market share against larger, more entrenched competitors
• Companies able to charge premium prices for their patented products
• Companies able to license their patented inventions
– NPEs
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Those Arguing for a Narrow Scope of Patent Protection– Argument: Narrow protection is needed to prevent the
continued growth of patent infringement lawsuits, and especially suits by NPEs
– Examples of companies making this argument are:• Companies who consider patents a drain on their bottom line
and want their competitors to have fewer patents, which the competitors might seek to license or might be the basis of a patent infringement lawsuit
• Companies who believe that NPEs are using patents to hold up industry sectors, especially high tech sectors
• This strain is exacerbated in the present economic environment where companies already face greater cost pressures
The Debate: Broad vs. Narrow Protection
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Let’s Play: “Is This Patentable?”
• A new method for manufacturing a pharmaceutical
• A fuel-efficient automobile engine• A hammer• A vaccine for swine flu• Gravity• A mathematical algorithm• A genetically modified bacterium• A business method for hedging the
risk of commodities trading
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Where It All Begins
• 35 U.S.C. § 101“Whoever invents or discovers any new and useful process,
machine, manufacture or composition of matter, or any new and useful improvements thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
• So, there are four statutory categories of patent eligible subject matter:– Processes– Machines– Manufactures– Compositions of matter
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Examples of Milestones in Determining Patentable Subject Matter Scope
• Biotech – Chakrabarty case– Case involved an invention of a genetically modified
bacterium
– The U.S. Supreme Court interpreted § 101 broadly:“Anything under the sun that is made by man” is
patentable.
Diamond v. Chakrabarty, 447 U.S. 303, 308-09 (1980)• This decision, which occurred during the nascent years
of biotechnology, had a positive effect on the growth of the industry
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• Biotech – Chakrabarty case– Not Patentable: laws of nature, natural phenomena
or abstract ideas• Mathematical formulas or algorithms
• Products and processes of nature
• Genes, proteins, cells or organisms as occurring in nature
• Mental processes
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Computer Software – Supreme Court Trilogy (Benson, Flook, and Diehr)– The Benson invention: Method of programming a
general purpose digital computer using an algorithm to convert binary-coded decimal numbers into pure binary numbers
– The Court found the Benson invention unpatentable because the invention was an algorithm, which is no more than abstract mathematics
Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972)
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Computer Software – Supreme Court Trilogy (Benson, Flook, and Diehr)
• Benson:– Phenomena of nature, mental processes and abstract
intellectual concepts are not patentable because they are the basic tools of scientific and technological work
– But, new and useful inventions derived from such discoveries are patentable
– The Supreme Court emphasized its decision did not preclude computer software from being patented; it just precluded software where the only useful characteristic is an algorithm
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Computer Software – Supreme Court Trilogy (Benson, Flook, and Diehr)– The Flook invention: Method of calculating alarm
limits by using an algorithm to make the system responsive to trends but not momentary fluctuations in process variables such as temperature
– Similar to Benson, the Flook invention was found unpatentable because the invention was based on an algorithm, which must be considered to be in the prior art
Parker v. Flook, 437 U.S. 584, 594-95 (1978)
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Computer Software – Supreme Court Trilogy (Benson, Flook, and Diehr)– The Diehr invention: method of molding raw,
uncured synthetic rubber into cured precision products using a mathematical equation
– This invention was found to be patentable because Diehr “seek[s] only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process.”
Diamond v. Diehr, 450 U.S. 175, 187-88 (1981)
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Computer Software – Supreme Court Trilogy (Benson, Flook, and Diehr)
• Diehr:– The Supreme Court insisted that patent eligibility
must be decided on the basis of the claim (or invention) considered as a whole
– Unlike in the Flook case, in Diehr, the claimed invention was found to depart from the prior art in more than just a facially trivial way
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Business Methods – State Street Bank– The State Street Bank invention: a data
processing system for implementing an investment structure
– The Federal Circuit found this patentable because “the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces ‘a useful, concrete and tangible result.’”
State Street Bank & Trust Co. v. Signature Financial Group Inc., 149 F.3d 1368, 1373 (Fed. Cir. 1998)
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Business Methods – State Street Bank– The Federal Circuit held that the claimed invention as
a whole must be useful and accomplish a practical application
– The Federal Circuit set a standard for business method patents, which required that the claimed invention must produce a “useful, concrete and tangible result”
• This standard has since been overruled– The Supreme Court denied certiorari
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Business Methods – State Street Bank– State Street Bank opened the flood gates for business
method patents, resulting in a surge of applications and granted patents
– The large volume of business method patents granted has been criticized because
• Early in the surge of applications, the USPTO allowed a high number of these applications (although in recent years, there has been a lower allowance rate)
• Some of these patents are perceived to be too broad or of poor quality, perhaps because of the difficulty Patent Examiners have in searching for prior art
• Patent Examiners are perceived not to be suitably qualified to evaluate these inventions because they usually have a science background and not a business background
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Business Methods – Bilski– The Bilski invention: a method of hedging the risk in
the field of commodities trading
– This process is performed by people without any requirement of computer-based manipulation
– The Patent Examiner and the PTO’s Board of Appeals found the invention was not patentable
• The Federal Circuit also held that this invention was not patentable, and in doing so, tried to clarify the standards applicable in determining whether a claimed method constitutes a statutory “process” under § 101
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Business Methods – Bilski– Relying on Benson, Flook, Diehr, and other
Supreme Court cases, the Federal Circuit outlined a “machine or transformation” test
– Under this test, a claimed process is patent eligible under § 101 if: 1. It is tied to a particular machine or apparatus; or
2. It transforms a particular article into a different state or thing
In re Bilski, 545 F.3d 943, 961-62 (Fed. Cir. 2008) (en banc)
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Business Methods – Bilski– The Federal Circuit held that
• The claimed “use of a specific machine or transformation of an article must impose meaningful limits on the claim’s scope”
• The “transformation must be central to the purpose of the claimed process”
• The “useful, concrete and tangible result” inquiry from the State Street Bank and other cases is inadequate
– The Federal Circuit did not rule out the possibility that it may in the future refine or augment the “machine or transformation” test or how it is applied
Examples of Milestones in Determining Patentable Subject Matter Scope
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• Business Methods – Bilski– The Supreme Court accepted certiorari of this
appeal– The high interest in various industries, bar
groups and academic circles in how this case is decided has resulted in a large number of amicus briefs being filed
– The Supreme Court has scheduled its oral argument in this appeal for November 9, 2009
Examples of Milestones in Determining Patentable Subject Matter Scope
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