My book tells small businesses, entrepren-eurs, independent inventors, and artists how to stop "Idea Theft," and includes new strategies in light of recent changes in the patent law. It's a clear, comprehensive and concise, easy read. Click on the image to purchase the book online.
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I have expressed my concerns to members of the Orange County congressional delegation about the pending legislation H. R. 9 discussed in previous newsletters. A member of this delegation recently informed me that this bill, although voted out of the house judiciary committee, is unlike to reach the floor for a vote because many interested parties are raising serious objections to the bill.
The Future of Software and Patent Protection
The steady rejection of software patents in the past year and a half has raised concerns about the durability of software patents, the devaluation of patents in general and the overuse of Section 101 as a basis for wholly invalidating inventions as patent ineligible. The impetus for this apparent backlash against software patents was the Supreme Court's landmark decision in Alice Corp. v. CLS Bank International in 2014. In the wake of the Alice decision, the Federal Circuit, various district courts, the Patent Trial and Appeal Board and examiners at the U.S. Patent and Trademark Office have cited the Supreme Court's ruling to substantiate their dismissal of other inventions as patent ineligible based upon their claims being tied to abstract concepts - and there is no indication that a different perspective will prevail soon.
The case focused on the patent eligibility of the plaintiff's computer-operated escrow service for financial transactions. The Court concluded that the claims supporting this "innovation" were related to an abstract idea. Moreover, the use of a computer for implementation of an abstract concept did not render the subject matter patentable. The justices in the case applied a two part test to determine whether an invention can be deemed patent-eligible. First they asked whether the creation consists substantially of subject matter that is not eligible for patent protection, such as a law of nature or abstract idea. If the answer is affirmative, the second prong of the test asks whether the remaining aspects of the invention contain an "inventive concept." The invention is eligible for patent protection only if part two of the test is satisfied.
Avedis Kifedjian granted U.S. Patent No. 9,054,463
Determining patent ineligibility for software products at the outset of the inquiry raises two critical issues: one procedural and one substantive. From a procedural perspective, the effect of this trend is that many courts have been striking down patents on motions to dismiss, rather than waiting for later phases of litigation. Thus, innovations are being rejected out of the gate for ineligible subject matter before a meaningful evaluation of the innovation's novelty or obviousness has occurred. The court's unwillingness to investigate patent eligibility during later stages of discovery could seriously impede an innovation from establishing its value in the marketplace.
On a substantive level, the rejection of software patents because the innovation's claims are drawn to abstract subject matter and processed on a non-specific machine belies the precise feature that renders software valuable. Software is intended to operate across platforms, yet its compatibility with other processes seems to be what the courts have identified as the reason for its patent ineligibility. Specifically, they have asserted that software functions on any type of machine in much the same way that the computer-operated escrow service in the Alice case could be operated on any computer machine. This incongruence suggests that the courts and legislature should consider the ultimate value and purposes of software in deciding the threshold inquiry for patent ineligibility.