considerations for patent protection of it and ......encryption component, one or more processing...

Considerations for Patent Protection of IT and Telecommunications Inventions

Global IP Convention 2011

Susan Perng [email protected] 28-30, 2011

Reasons for patenting – market protection

� i4i v. Microsoft (93 USPQ2d 1943, Fed. Cir. 2010)� A method for producing a first map of metacodes and their addresses of use

in association with mapped content and stored in distinct map storage means, the method comprising:

� providing the mapped content to mapped content storage means;

� providing a menu of metacodes; and

� compiling a map of the metacodes in the distinct storage means, by locating, detecting and addressing the metacodes; and

� providing the document as the content of the document and the metacode map of the document.

� Patent holder i4i was a software consulting company. i4i customers would hire i4i to develop and maintain customized software

� i4i was not selling computer packages per se for consumer use, but semi-tailored service software

� Jury awarded i4i $200 million in reasonable royalty damages

� Also award $40 million in damages for ‘willful infringement.”� i4i also awarded preliminary injunction

Reasons for patenting – monetization

� NTP v. Research in Motion (75 USPQ2d 1763, Fed. Cir. 2005)�“The Blackberry case”

� At district court, patent holding company NTP prevailed in patent litigation suit against Blackberry manufacturer Research in Motion

� At lower court level, NTP was awarded a damages award of $53.7 million in combined royalty payments and damages for willful infringement

� District court also granted NTP a permanent injunctionrequiring Research in Motion to cease infringement of NTP patents

� NTP and Research in Motion settle dispute for $612.5 million

Reasons for Patents -Setting the playing field for negotiation purposes

� i2 v. SAP (E.D. Texas Docket No. 2:06-CV-352)� USP 5,764,543 and 5,930,156 (Extensible model network

representation system for process planning)� USP 5,983,194 (Planning coordinating systems for separate factory

planning systems and methods therefor)� USP 6,055,519 (Framework for negotiating and tracking sales)� USP 6,167,380 and 7,085,729 (System and method for allocating

manufactured products to sellers)� USP 6,188,989 and (System and method for managing available

to promised product)

� SAP v. i2 (N.D. Calif. No. 07:04187)� USP 6,407,761 (System and method for the visual customization

of business object interfaces)� USP 6,750,766 (Alerts monitor (indicating critical conditions in

warehousing function))� USP 7,222,369 (Role-based portal to workplace system)

� Parties agree to settle both disputes with one time payment of $83 million from SAP to i2.� Which party had more patents “in play?”

� Whose patents appear more critical to management of data?

� Apparatus� Individual processing elements (receiver or data gatherer,

encryption component, one or more processing engines)

� System� Comprehensive system including distributed elements for receiving

data, processing or routing, and transmission

� Method� Describes steps of carrying out the invention, can be a few steps

(component) or more comprehensive step of steps (system)

� Article of Manufacture (computer readable medium)� A tangible computer-readable medium embedded with the

program causing as computer to perform steps of (A,B,C) or to act as components (A,B,C)

Types of claiming formats recognized in U.S. patent law applicable to IT and Telecom patents

Different classes of claims raise different issues for purposes of infringement analysis

� Apparatus claims tend to be more self-contained –usually exist at a single geographic location

� Computer-readable medium claims tend to be more self-contained – usually exist at a single geographic location

� System claims can have elements distributed across different geographic locations, including in different countries

� Method claim steps can be performed either in a single geographic location, or can be performed in different geographic locations including different countries

� Steps of a method claim can be performed by different parties


Direct infringement: 35 U.S.C. 271(a)

Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.


Infringement based on importation: 35 U.S.C. 271(f)

�(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

�(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial non-infringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.


Infringement based on importation: 35 U.S.C. 271(g)

Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.

Example of System Claim – NTP v. RIM

A system for transmitting originated information from one of a plurality of originating processors in an electronic mail system to at least one of a plurality of destination processors in the electronic mail system comprising:

at least one gateway switch in the electronic mail system, one of the at least one gateway switch receiving the originated information and storing the originated information prior to transmission of the originated information to the at least one of the plurality of destination processors;

a RF information transmission network for transmitting the originated information to at least one RF receiver which transfers the originated information to the at least one of the plurality of destination processors;

at least one interface switch, one of the at least one interface switch connecting at least one of the at least one gateway switch to the RF information transmission network and transmitting the originated information received from the gateway switch to the RF information transmission network; and wherein …

Example of System Claim – NTP v. RIM

� The Federal Circuit held that there was direct infringement of the system claim even though a relay device, corresponding to the “interface switch” of the asserted claim was located in Canada and not the United States

� The determination of infringement was not made under the provision that the system was “made” in the U.S. but that the system was being “used” in the U.S.

� “use” of the system is where the system as a whole is put into service and where its beneficial use is obtained

Example of Method Claim- NTP v. RIM

A method for transmitting originated information from one of a plurality of originating processors in an electronic mail system to at least one of a plurality of destination processors in the electronic mail system comprising:

transmitting the originated information originating from the one of the plurality of originating processors to a gateway switch within the electronic mail system;

transmitting the originated information from the gateway switch to an interface switch;

transmitting the originated information received from the gateway switch from the interface switch to a RF information transmission network;

transmitting the originated information by using the RF information transmission network to at least one RF receiver which transfers the originated information to the at least one of the plurality of destination processors; and

transmitting other originated information with the electronic mail system from one of the plurality of originating processors in the electronic mail system to at least one of the plurality of destination processors in the electronic mail system through a wireline without transmission using the

RF information transmission network; and wherein…


The Federal Circuit declined to find any basis of infringement of the method claim

Use of a patented method requires performance of the series of acts as recited in the method

The sale of equipment to perform the process is not a sale of the process and is not a use of the process

Each step of a method must occur in the U.S.

The “importation” provisions of 35 271(f) are not applicable to method claims

The data that may be transmitted into the U.S. as a result of performing the process of transmission from Canada is not import of a “product” of the process within the definition of

35 U.S.C. 271(g)


Secondary Infringement (infringement including multiple parties). 35 U.S.C. 271(b) and (c)

�(b) Whoever actively induces infringement of a patent shall be liable as an infringer.

�(c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination, or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.


A method for transmitting originated information from one of a plurality of originating processors in an electronic mail system to at least one of a plurality of destination processors in the electronic mail system comprising:

transmitting the originated information originating from the one of the plurality of originating processors to a gateway switch within the electronic mail system; [origination by a user]

transmitting the originated information from the gateway switch to an interface switch; [transmission by the user]

transmitting the originated information received from the gateway switch from the interface switch to a RF information transmission network; [service by equipment of provider 1]

transmitting the originated information by using the RF information transmission network to at least one RF receiver which transfers the originated information to the at least one of the plurality of destination processors; [service by equipment of provider 2] and . . .

Enforcing the Method Claim

�Direct infringement occurs via acts of multiple parties (end user, service provider 1 and service provider 2)

�The “deep pocket” service providers are not going to originate messages (except in the trivial case such as testing). Therefore, there is no liability of the service providers for direct infringement under 35 U.S.C. 271(a)

�Must pursue recourse against service provider 1 and/or service provider 2 as secondary infringers under

35 U.S.C. 271(b) or 35 U.S.C. 271(c)

�More cumbersome enforcement because more parties are involved, and more proof will be required to demonstrate secondary infringement liability

Enforcing the Method Claim

�271(b) Induced Infringement

� Intent to cause another to infringe the patent

� Active inducement can be shown by evidence of

� 1. Licensing/Indemnity

� 2. Advertising

� 3. Instructional information on how to infringe patent

� 271(c) Contributory Infringement

� Sale of Component Especially Designed for Use in Patented Process or Combination

� The article is a non-staple article or commodity (Question of Fact)

� Apparatus� Individual component or subset of components

� Covers one side of transaction or specific feature� Transmission aspect (encryption, compression or

format)� Receiver aspect� Primary processing feature

� Benefits� Easier format to enforce against individual users� Avoid “extra-territoriality” of network or system-based

claims

� Potential Disadvantages� Possibly lower base or royalty rate for damages

Types of claiming formats - apparatus

� System or Network� Comprehensive set of components interoperating

� Covers fuller spectrum of transaction and process� Transmission aspect (encryption, compression or

format)� Receiver aspect, and� Primary processing feature

� Benefits� Generally a higher base or royalty rate for damages as a

system is likely to be more expensive than its individual components

� Potential Disadvantages� Have to be cognizant of “extra-territoriality” of

network or system-based claims

Types of claiming formats - system

� Method� Steps for performing process or parts of process that transform an

article from one state or thing to a different state or thing� U.S. patent law does not recognize “algorithm” as patentable

subject matter� The invention can contain an algorithm, but the algorithm

must be applied to transform an article from one state to a different state

� Benefits� For purposes of determining allowability in U.S. Patent Office,

examination of method claims proceeds more smoothly than for apparatus or system claims� U.S. patent Examiners tend to misapply doctrines of “intended

use” or disregard functional recitations in apparatus or system claims

� Potentially fewer estoppel issues will arise

Types of claiming formats - method

� Potential Disadvantages�U.S. Examiners are requiring method to be tied to particular apparatus (Bilski)�May require joinder of multiple parties to enforce as there may not be one party that performs all the steps�May need to rely on “indirect” infringement rather than direct infringement

� Does infringer specifically tell users how to perform the steps or encourage infringement OR

� Is a seller’s product made specifically to infringe the method (or combination of elements)?

�Extra-territoriality concerns

Types of claiming formats - method

� Article of Manufacturer – Computer-readable medium claim� cover one side of transaction or specific feature

� Transmit� Receive� Primary Process

� Benefits� Protection of tangible medium including software code that

causes the computer to execute the instructions of the code

� Closest protection that U.S. allows for a “program”

� Potential Disadvantages� U.S. does not protect internet-distributed programs as a

form of “computer readable medium.”

Types of claiming formats – computer readable medium

Conclusion

� Multiple strategic reasons to build a patent portfolio for information technology and telecommunications based inventions

� Be aware of the type of claims included in patent application� Include a mix of statutory classes of invention

� Avoid application including only method claims

� Include a mixed “range” � Individual aspect (receiver, transmitter, processor) � Full system

� Consider trans-boundary implications� U.S. patent laws do not have extra-territorial effect, except

under limited conditions

Thank you

For Questions or Comments,

Please contactSusan Pan

[email protected]

202 663 7373

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