Kristen Jakobsen Osenga

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Bilski and BeyondChanging IP for the
Information Age

• Kristen Jakobsen Osenga
• University of Richmond School of Law

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(No Transcript)
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Overview

• Other Notable Subject Matter Cases
• Implications for Business Methods, Software Tax
  Inventions

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Other Notable 101 Cases

• In re Nuijten (CAFC)
• In re Ferguson (CAFC, SCT)

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In re Nuijten

• 500 F.3d 1346 (CAFC 2007, cert denied 2008)
• Method for introducing watermark into signals
  with reduced distortion allowed
• Storage medium with method allowed
• Signal encoded via claimed method - rejected

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In re Nuijten

• Examiner, BPAI reject signal claim
• CAFC (JJ. Gajarsa, Linn, Moore)
• Majority
• A transitory, propagating signal . . . is not a
  process, machine, manufacture, or composition of
  matter.
• Process steps, machine made of parts,
  manufacture must be tangible
• Dissent (J. Linn)
• Article of manufacture (made by man)

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In re Ferguson

• 558 F.3d 1359 (CAFC 2009)
• Method of marketing a product, comprising
• Developing a shared marketing force
• Using shared marketing force to market plurality
  of products from plurality of companies
• Obtaining share of total profits from each of
  plurality of companies and
• Obtaining an exclusive right to market each of
  plurality of products.

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In re Ferguson

• A paradigm for marketing software, comprising
• A marketing company that markets software from a
  plurality of different . . . software companies,
  and carries out and pays for operations
  associated with marketing of software for all of
  said different . . . software companies

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In re Ferguson

• Examiner rejected under other patentability
  requirements, BPAI raised 101
• CAFC (JJ. Newman, Mayer, Gajarsa)
• Method claims fail Bilskis machine-or-transformat
  ion test
• Paradigm claims are not drawn to any of the four
  statutory categories, but rather abstract idea
• J. Newman concurs in result, but for 103
  reasons, not subject matter eligibility

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In re Ferguson

• Petition for writ of certiorari filed June 2,
  2009
• Are claims that recite business methods
  unpatentable per se when they are not tied to a
  machine and do not preempt any mathematical
  algorithm?
• Is a claim unpatentable under 101 as being an
  abstract idea because it does not come within the
  machine-or-transformation test?

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Implications for business methods, software, tax

• What do we do now???

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What are the courts making of this?

• Some district court cases, many BPAI cases
• Compilation of post-Bilski and other subject
  matter-based opinions available at
• www.aipla.org/MS/ElectronicandComputerLaw
• Take-away lessons?

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Fort Properties Inc. v. American Master Lease
(C.D. Cal. 1/22/09)

• Method for creating real estate investment
  instrument
• Aggregating real property, encumbering property,
  creating plurality of deedshares by dividing
  title
• PTO oks under State Street (useful, concrete,
  tangible), ct kills under Bilski
  (machine-or-transformation)
• Need not be performed by machine
• Manipulates only legal ownerships (not physical)

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Cybersource Corp. v. Retail Decisions (N.D. Cal.
3/27/09)

• Method Beauregard claims
• A method for verifying creditcard transaction
  over the Internet
• Obtaining information about other transactions
• Constructing a map of credit card numbers based
  on other transactions and
• Utilizing map to determine if transaction is
  valid.

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Cybersource Corp. v. Retail Decisions (N.D. Cal.
3/27/09)

• No transformation
• Credit card numbers are notphysical or
  representations
• Abstraction only relationship between card
  holder and card issuer
• No machine
• Over the internet does not tie to a particular
  machine
• Internet abstraction, no meaningful limit

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Cybersource Corp. v. Retail Decisions (N.D. Cal.
3/27/09)

• Computer readable medium containing program
  instructions for detecting fraud in a transaction
  . . . over the internet, wherein execution of the
  program instructions by one or more processors
  causes one or more processors to carry out the
  steps of
• Obtaining credit card information
• Verifying based on plurality of parameters

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Cybersource Corp. v. Retail Decisions (N.D. Cal.
3/27/09)

• No exemption from Bilski test for Beauregard-type
  claims
• Programmed computer (generality) not machine
• Process steps not transformation

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Every Penny Counts Inc. v. Bank of America Corp.
(M.D. Fla. 5/27/09)

• System (for payors to donate) comprising
• A network
• Entry means coupled to network
• Identification entering means in entry means
  coupled to network
• Said network having computing means
• Having data concerning payor
• Being responsive to data about payment
• Apportioning excess payment

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Every Penny Counts Inc. v. Bank of America Corp.
(M.D. Fla. 5/27/09)

• System process for 101 purposes (???)
• Simply because the process at issue requires
  machine or computers to work, however, does not
  mean that the process or system is a machine.
• No transformation, no machine not eligible for
  patenting

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A Sampling of Cases from the Board
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BPAI Case Sampler Algorithms

• Ex parte Cornea-Hasegan (2008-4742, 1/13/09)
• Method for predicting result of floating point
  mathematical operations calculating results
• No machine (general processor, unspecified
  programming)
• No transformation (just numbers)
• A computer readable media including program for
  predicting result article of manufacture, but
  fails under Bilski

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BPAI Case Sampler - Machines

• Ex parte Uceda-Sosa (2008-1632, 11/18/08)
• Method of representing information
• Middleware module to represent store
  information
• A library having a module to generate an
  information container, said module allowing for
  (the claimed method)
• An apparatus to represent store information
• A storage unit containing a library having a
  module to generate information container, said
  module allowing for (method)
• A signal-bearing medium tangibly embodying a
  program of machine readable instructions to
  perform the claimed method

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BPAI Case Sampler - Machines

• Method claim fails machine-or-transformation
• Middleware claim fails because functionally
  descriptive
• Module is simply a computer software module
  that is used to represent and store information .
  . . However, the claimed software module is not
  tangibly embodied on a computer-readable medium
  and is therefore functional descriptive
  material.
• Apparatus claim are 101 subject matter
• Signal claim fails under Nuijten

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BPAI Case Sampler - Software

• Ex parte Seshadri (2008-2854, 2/27/09)
• A computer implemented notification system
  comprising the following computer executable
  components
• A component executing on a computer
• A database engine and
• A notification server
• Examiner said software per se BPAI says no
• Claims recite a component executing on a
  computer, not software per se (OK under 101)

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BPAI Sampler Computer Media

• Ex parte Bo Li (2008-1213, 11/6/08)
• Computer usable medium having computer readable
  program embodied thereon
• BPAI reverses examiners 101 rejection
• Nuijten does not remove validity of Beauregard
  claims

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BPAI Sampler Computer Media

• Ex parte Kumar (2008-1649, 11/19/08)
• Tangible computer accessible medium, comprising
  software instructions executable to implement
• BPAI doesnt act under 101, but cautions that a
  computer readable medium comprising a modulated
  signal may not be statutory subject matter
  post-Nuijten

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BPAI Sampler Computer Media

• Ex parte Brubacher (2008-1508, 1/22/09)
• Computer-readable medium having
  computer-executable instructions
• BPAI upholds examiners 101 rejection because
  computer-readable medium having
  computer-executable instructions encompasses
  signals, not subject matter per Nuijten

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BPAI Sampler Computer Media

• Ex parte Salesin (2008-2578, 5/22/09)
• Computer-readable medium having
  computer-executable instructions
• BPAI initiates 101 rejection
• A computer readable medium includes a signal
  embodied in a carrier wave. A signal embodied in
  a carrier wave is not statutory subject matter
  because it does not fall within any of the four
  categories of statutory subject matter. See In
  re Nuijten.

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BPAI Sampler Data Structures

• Ex parte Hoya (2008-0024, 2/26/09)
• A memory system adapted to model physiological
  functionscomprising
• A short-term memory neural network unit and
• A long-term memory neural network unit
• Not statutory subject matter under Bilski and
  Nuijten because claim can cover embodiment
  lacking tangible structure

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BPAI Sampler Data Structures

• Ex parte Klosterman (2008-1649, 4/20/09)
• A computer program product for use in an
  information handling systemcomprising a
  plurality of instructions
• BPAI initiates 101 rejection
• A computer program product does not fall within
  any of the four classes of 101. These claims
  recite a computer program product data
  structureThere is no claim language . . . which
  defines any structural and functional
  interrelationship between the data structure and
  the computer.

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BPAI Sampler Refining Bilski

• Ex parte Sesek (2009-0458, 3/25/09)
• Method of notifying a mail carrier of anticipated
  load by monitoring mail, producing a forecast,
  notifying mail carrier of forecast, and
  notifying of changes
• Not tied to a machine
• Not a transformation, does not transform mail or
  any article
• Transmits a forecast, not physical or
  representation

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BPAI Sampler Refining Bilski

• Ex parte Harris (2007-0325, 1/13/09)
• Method of conducting an auction over a network
• Allowing users to submit bids over network
• Collecting bids on server
• Defining secret rules for auction
• Not machine
• Network, server not specified electronic, could
  be human (and not limited)
• Not a transformation (data isnt physical)

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BPAI Sampler Refining Bilski

• Is it AND or OR?
• Ex parte Becker (2008-2064, 1/26/09)
• To the extent that Appellants claims may
  transform data, we note that transformation of
  data, without a machine, is insufficient to
  establish patent eligibility under 101.

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BPAI Sampler None of the Four

• Ex parte Daughtrey (2008-0202, 4/8/09)
• A user interfacecomprising a fare evaluation
  result table.
• User Interface is not one of the four
  categories
• Ex parte Johnson (2009-0470, 6/10/09)
• A network collaboration tool . . . comprising web
  browser software, a graphical collaboration tool,
  and a server process
• Network collaboration tool is not one of the
  four

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Pointy Headed Thoughts

• Whats wrong with Bilski
• Problems with business method patents
• How they should handle the problems
• Special issues for tax methods

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Take Away Lessons? (from scratch)

• Add a machine
• method step by a programmed computer
• Make sure theres support in the spec for
  exemplary hardware
• Use non-signal computer readable media
• storage devices
• Multi-format claims
• Machine, process, article of manufacture

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Take Away Lessons? (pending/issued)

• Add a machine and/or non-signal computer readable
  mediaif you can
• Support in spec is great
• Inherency/PHOSITA argument if not
• Tougher path but it could work
• Potential for reissue?
• New interpretation of 101 can help meet reissue
  standard (invalid because patentee claimed more
  or less than he had a right to do so)