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Patent Eligibility after Alice v. CLS Bank

The U.S. Supreme Court recently issued its decision in Alice v. CLS Bank regarding the patentability of computer-implemented financial and other business methods.  The Court held that patents that attempt to claim simply an “abstract idea” implemented on a general purpose computer are not valid.  Although this is not actually a change in the law, it is a clarification of this evolving area of patent law.  And based on the sudden harsh treatment of computer-implemented method patent claims by both the Patent Office and the courts, combined with the current lack of guidance given to patent examiners for examining such claims, patent owners should not only address the claims of their currently pending applications, but they should also strongly consider revisiting their granted patents in this area for possibly reissuing those patents with revised claims in order to preempt potential challenges to their patents under the Alice decision.

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Should We be Watching for the New “Trade Dress” in the Fall Fashion Shows?

Not really.  Trademark law encompasses the subpart known as “trade dress.” When an average consumer can identify the source of a good or service by its look and feel, then this may be its trade dress.  The design or configuration of a product, the labeling and packaging of goods, and the décor or environment where services are provided can all be protected as trade dress.  Trade dress features must be distinctive and not functional. Examples include the shape of a Coca-Cola bottle, the red color on the sole of a Christian Louboutin pump, or the image of a horse-mounted polo player on a bottle of cologne, duffle bag, or shirt from Ralph Lauren.  Each of these examples are not functional to the item, but are distinctive in how they identify the source of the goods. When a company’s trade dress has achieved distinctiveness and is nonfunctional, it should be protected…

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Abstract Ideas – Are they Patentable?

Recently, the USPTO issued a memorandum to its Examiner Corps, entitled “Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation Pty. Ltd. v. CLS Bank International, et al.” At its core, the memo addressed subject matter eligibility of claims involving abstract ideas, particularly computer-implemented abstract ideas. Comments were submitted by AIPLA and IPO (two leading IP bar associations). The memo and the comments recognized the Alice decision did change substantive patent eligibility law or fundamental examination guidance.  However, the comments emphasized that Alice did not create a per se excluded category of business methods or software, or impose any special requirements for eligibility of business methods or software. The premise of the guidance is that abstract ideas are fundamental building blocks of human ingenuity and are not patentable—inventors must use those building blocks to construct their innovations. Examiners are tasked with evaluating whether (1) the claim is “directed to” an abstract…

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Copyright Law

The Transmit Clause gives copyright holders the exclusive right to transmit or otherwise perform a copyrighted work to the public by means of a device or process.

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Alice Decision

The Supreme Court affirmed the Federal Circuit’s decision in Alice Corporation v. CLS Bank holding that patents directed to schemes or methods of mitigating settlement risks in the exchange of financial obligations between two parties claimed unpatentable subject matter.  Although the patents recited system claims implementing the method on a computer system, the Supreme Court held that merely reciting a generic computer in the claims does not make an otherwise abstract idea patent eligible.  The decision re-affirms long-standing Supreme Court precedent with respect to the un-patentability of abstract ideas and reiterates the importance of drafting the patent application on such methods in a way that takes the claimed subject matter out of the abstract idea category and puts it into the implementation category.  Without an adequate disclosure of a specialized implementation, the patent application may be rejected by the patent office and, even if the application is granted, any patent obtained…

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An “Exceptional Case” Need Not Be so Very Exceptional Anymore

In a patent suit involving a patent covering an elliptical trainer exercise machine, the US Supreme Court significantly changed a long-established standard for awarding attorney fees to the prevailing party.  Under the old standard, the trial court had the discretion to order the losing party to pay the prevailing party’s attorney fees if it found that the case was “exceptional.”  A case was regarded as “exceptional” if it was “objectively baseless and brought in subjective bad faith.”  This is a tough standard to meet.  The Supreme Court has now lowered the bar so that an “exceptional case” is one that either “stands out from others” with regard to the party’s litigation position (considering the law and the facts of the case), or is litigated in an unreasonable manner.  The Supreme Court instructed that the trial court should look at the totality of the circumstances, and that there were no fixed…

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Limelight: 9-0 Supreme Court Reversal

There was a brief glimmer of hope for those patents with claims covering steps performed by more than one entity. But once again the Supreme Court has chastised the Federal Circuit for not following its prior precedent.  Specifically, there can be no active inducement of infringement unless there is first direct infringement, and direct infringement does not exist if more than one entity is performing the steps. This case illustrates the importance of drafting claims that are directed to single actor and thinking about how infringers might try to design around the claims by having a third party perform one or more of the claimed steps. Review LimelightYellowCopy for the Supreme Court’s opinion.      

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Cybersquatting and Trademark Complaints Must Provide Factual Support under Iqbal/Twombly

The Southern District of Florida recently dismissed a cybersquatting case we had on behalf of one of our clients. The judge agreed with our argument that the mark was merely descriptive and that no facts were alleged to support secondary meaning in the one year period between plaintiff’s first use of the mark and our client’s registration of the domain name. So while dismissals at the pleading stage are rare, it is important to consider in all cases whether a motion to dismiss is appropriate, especially after the U.S. Supreme Court’s decisions in Iqbal and Twombly requiring that plaintiffs provide factual support rather than just mere conclusory statements. Click here for a link to the Court’s order of dismissal.

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There You Go Again – Infringing my Patent!

Have you ever taken someone to court, based on ongoing offending activities of that person, won the case, and then found he/she was once again engaging in “the same” offensive activity?  If so, you are probably aware that a Court Order is enforceable through a “Contempt Action” to prevent the person from engaging in the activity.  Well, assume you own a patent, and a competitor infringes that patent – an ongoing tortious activity.  Assume further that you sue the competitor in Federal District Court for patent infringement.  And, during litigation, the competitor concedes the product it makes and markets infringes (some of) the patent claims.  The district court issues an Order with an injunction enjoining the competitor from engaging in any further infringing activity, such as marketing or making the infringing product. Later, to your surprised chagrin, the competitor starts selling a “slightly altered” version of the product!  What to…

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Is Your Invention Really New? Summarizing Novelty under the New U.S. Patent Law

In a race, it goes without saying that the first person to pass the finish line wins.  But, what would happen if the location of the finish line were suddenly moved back?  To a certain extent, that is exactly what has happened to U.S. patent applicants.  On March 16, 2013, the U.S. transitioned from a first-to-invent patent system to a first-to-file patent system. Now imagine that in addition to the finish line being moved back, runners are told that the rules of the race have changed.  In particular, the bases for disqualification, say, false starts and inappropriate contact, have been modified.  In light of the new definition of “novelty” under U.S. patent law, it is as though both the location of the finish line has moved and the rules for running the race have been modified. If innovators wish to remain competitive in the race to obtain patents, it is…

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The Highway Goes Global

Followers of our newsletter are familiar with the evolution of the Patent Prosecution Highway (“PPH”), from bilateral agreements providing for the acceleration of a patent examination in the office of second filing after the office of first filing finds allowable subject matter, to PCT PPH which allows the same acceleration based on a favorable examination in the international stage.  Now, the PPH evolution continues with the new Global Patent Prosecution Highway (“GPPH”), providing applicants with another cost and time saving tool for the management of global patent prosecution. As previously reported, the PPH program was developed to promote fast-track patent examination procedures and allow patent offices from around the world to take advantage of work already done by other offices.  The PPH was one of the initiatives undertaken by the USPTO to help with the always-increasing load of patent examinations. The PPH program as initially constructed involves bilateral agreements between…

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The Neglected Design Patent?

When people talk about patents, they generally mean a “utility patent.”  To date, over 8 million utility patents have issued in the United States.  In contrast, only about 680,000 design patents have ever issued.  Why that discrepancy?  It’s hard to fathom, especially after Apple Corp. recently won a $1.05 billion jury verdict for design patent infringement against Samsung Electronics in the ongoing battle for cell-phone supremacy.[1]  So, the oft-neglected and overlooked design patent is clearly “no lightweight” in high-stakes patent litigation between heavyweights.  Nonetheless, the utility patent has almost entirely subsumed the entire concept of “a patent” in the public mind. While a utility patent provides exclusive rights in useful technology, its neglected design patent cousin provides exclusive rights in “ornamental designs.”  As marketing executives know, the ornamental design of a product is often as significant, or even more compelling, as the useful features of the product, especially in the…

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Texas Fashionably Late to the Uniform Trade Secrets Act Party

Significant changes in the law in Texas with respect to trade secrets went into effect September 1, 2013, with Texas becoming the 48th state to adopt the Uniform Trade Secrets Act.  Previously, there was no central repository for Texas trade secret law, as it was a combination of the common law, restatements, and the Texas Theft Liability Act. The Act changes Texas trade secret law in a number of material respects and applies to any alleged misappropriation occurring on or after the effective date.  The extent of the changes will be determined by the courts as they interpret the Act but the Act is believed by many to eliminate a number of ambiguities that existed in the prior trade secret laws of Texas.  The changes will make trade secret protection broader in some circumstances and narrower in others, but will likely give more clarity to what is and is not…

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CLS Bank Patent Analysis and Claims Salvaging

The courts have been particularly active recently with respect to the question of what is patentable subject matter.  Despite this activity, there has been no real guidance provided by the courts to practitioners. In CLS Bank v. Alice Corp., the Federal Circuit found the claimed computer-related subject matter not patentable.  Unfortunately, there were seven different opinions in the case containing at least three different approaches to determining whether particular subject matter is patentable. While the Federal Circuit and commentators have concentrated on the claims formation and issues regarding §101 patentable subject matter, the real issue not addressed by either party are the deficiencies in the SPECIFICATION and DRAWINGS.  Without a properly written specification with supporting drawings that define the invention, there is no hope of generating supporting claims that meet the court’s requirements for §101 patentable subject matter.  Thus, when properly analyzed, the issue in the CLS case is one…

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Black Gold: Patent Battle Royale Moving From Silicon Valley to Midland, Texas? | Intellectual Property in the Oil & Gas Industry

We have all heard of the patent battles between tech giants Apple and Samsung.  It is easy to imagine the countless patents that protect the new iPhone and Galaxy smart phones.  However, intellectual property is not limited to the Steve Jobs and Mark Zuckerbergs of the world.  A huge amount of intellectual property is being developed, and protected, in the oil field.  In fact, the next major patent dispute is more likely to involve a method of fracking than a processor on a smart phone.  The reason, in part, is that as “easy oil” reserves become more and more rare, oil and gas companies are developing incredible technological solutions in order to harness oil, which was previously believed unreachable.  In solving these complex problems, they are developing vast amounts of intellectual property.  Oil and gas companies of all sizes need to begin protecting their intellectual property because their competitors are. …

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The Proposed Unified European Union Patent System

by James H. Ortega The European Patent Organization has been developing a unified European Union (EU) patent system, which will include both a unitary EU patent, issued from the European Patent Office (EPO), as well as a Unified Patent Court (UPC) system for harmonized enforcement of unitary EU patents. Although a specific date for implementation of the proposed UPC system has not yet been established, the unitary patent process will go into effect January 14, 2014, with the UPC system likely following sometime in later 2014 or 2015. Thus, despite the complaints regarding both of the new systems, the upcoming implementation of at least the unitary EU patent system requires patent practitioners involved in European patent practice to become familiar with the system in order to properly advise their clients.

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Prior Art Recapture Under the AIA – What You Don’t Know Can’t Help You

by Colin P. Cahoon Often overlooked when discussing the myriad changes wrought by the America Invents Act (AIA), 35 USC Section 102(b)(2)(C) deserves close scrutiny by any company that hires potential inventors or that enters into joint development agreements with third parties. This new provision created by the AIA provides such companies with a powerful tool for removing potentially harmful prior art from consideration by the USPTO against patent applications that such companies might file in the future. To work properly, though, 102(b)(2)(C) needs to be considered when negotiating a joint development agreement and when first hiring any new potential inventor employees.

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The Federal Circuit’s En Banc Opinion on Patentability Under Section 101 – It’s Splitsville!

by Gregory Perrone This past Spring, in CLS Bank International, CLS Services Ltd. v. Alice Corp, Pty Ltd. 2011-1301 (Fed. Cir. May 10, 2013), a splintered en banc panel of the United States Court of Appeals for the Federal Circuit vacated its three-member panel’s reversal of the district court’s judgment and affirmed a grant of summary judgment of invalidity. The en banc panel held that a patent claiming a computerized system and methods for eliminating settlement risk are not eligible for patent protection under 35 U.S.C. Section 101. While the panel’s six opinions and 127 pages provide a menagerie of commentary on why subject matter may or may not be patent eligible, little guidance is offered to inventors, patent counsel or the courts on how to determine whether subject matter is patentable.

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Myriad Gene Patent Decision: A New Era in DNA Diagnostic Testing?

by Shaukat A. Karjeker In the race to map the human genome, many of the organizations involved obtained patents on gene sequences that they identified.  These patents were granted regardless of whether the applicant had determined any role or function of the sequence.  As a consequence, other researchers were effectively “blocked out” of research and development on the patented DNA sequences, unless they were able to negotiate a license. The unanimous opinion by Hon. J. Clarence Thomas, in Association for Molecular Pathology, et al v. Myriad Genetics, Inc., et al. completely changes the biotech and medical research landscape: DNA is a naturally-occurring composition and therefore not patentable.  With a single stroke, the Court has opened the flood gates for the development of customized gene-based medicine.  All issued patent claims to DNA sequences are now invalid, the DNA sequences are effectively “in the public domain,” and the sequences may be used in…

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Judicial Profile: Magistrate Judge Renee Harris Toliver

by Vincent J. Allen A profile on Magistrate Judge Renee Harris Toliver, the first African-American to sit on the federal magistrate bench in the Northern District of Texas, as published in the May 2013 issue of the Dallas Bar Association’s Headnotes.

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