obvIPat - Obviously Patentable

The blog for inventors, in-house counsel, & entrepreneurs.

Archive for May, 2013

Alice in Patentland II – Can a Look Across the Pond Help?

by Orlando Lopez

On May 10, 2013, the Federal Circuit (CAFC) issued their en-banc opinion(s) on CLS Bank Int’l v. Alice Corp.  Alice, an Australian corporation, had appealed the decision of the District Court invalidating the claims for not being directed to statutory (patentable) subject matter.  The claims at issue relate to conducting financial transactions using a third party supervisory institutions to settle obligations, in order to reduce the risk.  A divided court upheld the decision of the District Court.

The en-banc opinion does not provide a precedent that can guide us as how to determine whether a claim including an abstract idea recites statutory subject (or how to determine what qualifies as an “abstract idea”- I guess we will know one when we see one).  Although I do not embrace the “technical effect” approach of the EPO and “invention concept” is as nebulous as “technical effect,” a look at the EPO Boards of Appeal decisions could have been useful.

In decision T258/97 (citing T 27/97), the Boards of Appeal stated that the abstract concept could be included in the lack of obviousness consideration only if a contribution to a solution of a problem was linked to the abstract concept.  Assessment of lack of obviousness has to be based on the other elements of the claim if a contribution by the abstract concept to a solution of the problem could not be established.

Once the method claims aredeemed not to be patentable subject matter, the system claims can be attacked by obviousness (35U.S.C. §103).  In the Alice patents, the system claims have usual components – storage units, communications units – and a processor configured to perform the method.  If the method is not available for the §103 analysis, anyone skilled in the art (or not so skilled) could assemble the system from known parts.  That renders the system obvious and non-patentable. The above approach avoids having to extend the patentable subject matter (35 USC §101) analysis to systems and articles of manufacture, which are statutory subject matter.

Maybe a look at the EPO approach could have been useful.



Don’t be Afraid of Participating in SBIR Program

by Jesse Erlich

Many small companies have questioned whether participating in the Small Business Research and Development (SBIR) program, and therefore entering into a contract with the US government or receiving a grant from the US government, is worthwhile.  How many times have you heard, “the risks are too great”?  Do not turn down the opportunity to help fund your company’s research, design or development by not participating in the SBIR program.  In fact, receiving funds from the SBIR program is an excellent source of non-dilutive financing.

Most skeptics worry about losing ownership of their intellectual property when dealing with the government.  There is very little downside with respect to losing ownership of your inventions made under a government contract if you follow the rules and regulations (to be discussed in greater detail in future posts).  With respect to any inventions made under the SBIR contract or grant, the contractor (your company) and even the subcontractor will have the right to retain ownership of your inventions if title to your invention is elected and a provisional or non-provisional application is filed.  The only rights the government would obtain to your invention made under the contract or grant would be a nonexclusive, irrevocable, paid-up license for government use (confirmatory license).  In other words, the government has the right to use such an invention for governmental purposes (another topic we will address in future posts).  But remember, as an SBIR recipient you may be entitled to a sole source procurement contract related to the technology involved in your SBIR award.  When it comes to technical data and software, the contractor or subcontractor also has control of their use by the government.

Don’t forgo the opportunity to do business with the government.  Just seek out the proper advice, and soon you will receive additional funding for your company.