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  1. Software Related InventionsPatentable Subject Matter Donald M. Cameron 2014 Donald M. Cameron

  2. 2 Introduction • Why be concerned about patentability of software? • This is a quickly changing area of law • Many smaller businesses (technology companies) don’t receive investment unless they can get patents • It illustrates how the courts and patent offices grapple with issues of new patentable subject matter.

  3. 3 Introduction Cont.d • What is excluded from patentability? • Mere formula, equations, theorems. • Inventions requiring input of professional skill and judgment. • Automating a known process.

  4. 4 Canada – Statutory Definition Must be an “Invention” under the Patent Act. • “Invention” means any new and useful • Art; • Process; • Machine; • Manufacture; or, • Composition of matter … (s.2 Patent Act) • No patent shall be granted for any mere scientific principle or abstract theorem (Sub-s. 27(8) Patent Act).

  5. 5 Introduction Cont.d • Some key Doctrinal Questions • If the basis of software is an algorithm (which is a type of mathematical formula) how do we: • permit software patenting? • despite prohibitions on patenting mathematical formula?

  6. 6 Introduction Cont.d • Why does the Patent Act exclude formulae, equations, theorems? • Potentially too broad scope of coverage?

  7. 7 Introduction Cont.d • What will we consider? • Hardware • Software • Data Structures • Signals • Business Methods • Why are we concerned about these different aspects of computer systems? • Gives patent owner different people to sue. • Customers vs. Competitors • Cross-Border Systems

  8. 8 United States • Patentability of software and business methods had been thought to be resolved for years. • Software and business method inventions are patentable when they produce a “real, concrete, and tangible result”. • Key Decision: State Street Financial v. Signature Financial Group Inc. • In the past 2-3 years, this has all changed.

  9. 9 Europe • Inventions require industrial applicability, novelty, an inventive step, and a “technical character”. • Specific exemptions to patentability relate to computer programs and business methods. • The European Patent Office (“EPO”) has determined that certain computer-implemented inventions are patentable but has stopped short on business methods.

  10. 10 Canada – Case Law Shell Oil Co. v. Commissioner of Patents (1982) 67 C.P.R> (2d) 1 (S.C.C.) • “Art” is a word of very wide connotation and not to be confined … but extended to new and innovative methods of applying skill or knowledge provided that produce effects or results commercially useful to the public. • This broad definition of art has been lately restricted in Harvard Mouse and Monsanto v. Schmeiser cases.

  11. ? 11 The Common Principles • You can’t patent math or science • You can patent applied science Where’s the dividing line?

  12. 12 The Common Principles Cont.d • Claim 8. A method for calculating value “f”, comprising the step of” • Calculating f = m · a. • Claim 9. A computer implemented method for determining the force “f” provided by a moving brick, comprising the steps of: • Inputting variable “m”, where “m” is the mass of the moving brick measured in kilograms; • Inputting variable “a”, where a is the acceleration of the moving brick measured in meters per second per second; • Automatically calculating f = m · a, where “f” is the force provided by the moving brick in newtons; and, • Displaying variable “f”. • These are not proper subject matter.

  13. 13 13 U.S.A. - Software • AT&T v. Excel Communications • method of processing long distance carrier data • was patentable • does the number crunching produce a • useful, concrete and tangible result

  14. 14 14 U.S.A. - Software Cont.d • U.S.A. Beauregard • Inventive program on a disk • But – what does the program or software do?

  15. 15 15 Canada • Schlumberger Canada Ltd. v. Commissioner of Patents (1981), 56 C.P.R (2d) 204 (FCA) • Measurements obtained in the boreholes are recorded on magnetic tapes, transmitted to a computer, modified by mathematical formula set out in the specification and converted to human readable form. • Not patentable: • “mere scientific principle or abstract theorem”

  16. 16 16 Canada Cont.d • Schlumberger Canada Ltd. v. Commissioner of Patents “What the appellant claims as an invention here is merely the discovery that by making certain calculations according to certain formulae, useful information could be extracted from certain measurements. This is not, in my view, an invention within the meaning of s.2”

  17. 17 17 Canada Cont.d • The 1994 CIPO Guidelines: • 1. Unapplied mathematical formulae are not patentable • 2. Computer programs neither add to nor subtract from patentability • 3. Computer program integrated with traditional subject matter is patentable

  18. 18 18 Canada Cont.d In 2005, Canadian Patent Office issued new guidelines for Computer Implemented Inventions. The provided suggestions for describing such inventions: • Hardware • Are important elements: processors, memories, interfaces, displays and peripheral devices described? • Is the interaction with the network described? • Software • Does the patent describe: • Steps to be performed • Sequence to steps • Processes and algorithms • Interface • Data • Does the patent describe the source and form of input data? • What is the flow of data? • How does software manipulate or modify data?

  19. 19 19 Canada Cont.d Software Claims – Distinctions without Differences?? MOPOP Acceptable: A computer program product comprising: a memory having computer readable code embodied therein, for execution by a CPU for [list a specific function], said code comprising: [list code means] Unacceptable: A computer program for [list a specific function] comprising: [list code means]

  20. 20 20 Where’s the dividing line? software Software control system Hardware

  21. 21 Data Structures • Represent a physical implementation of a data model for organizing and representing information which is used by a computer program • The physical organization is responsive to the attributes of the data rather than specific content • E.g. MP3, customer database, or DVD data structure: organized and linked compressed video data portions having an indexing system or interface such as chapters, pointers, etc. to access particular portions of the video;

  22. 22 Data Structures – U.S.A. In re Lowry (1994) • data structure of database was patentable • dictated how application programs managed information; allowed the computer to operate more efficiently

  23. 23 Data Structures – Canada • No case law • CIPO Guidelines support patentability • Claimed as a product

  24. 24 Signal Claims • A signal is data or information briefly transmitted • It is not stored in memory. • E.g. Data communicated over the internet

  25. 25 Signal Claims Cont.d • In Re Nuijten (500 F.3d1346, Fed. Cir. 2007.) • A signal, standing alone, is not patentable. • A new method of watermarking (adding data listener cannot hear to an audio file, but which can be detected by computer) • Court held • Manufacture must be tangible • “Transient” or “fleeting” inventions are not patentable. • The claimed signal is devoid of any semblance of permanence during transmission.

  26. 26 Signal Claims Cont.d • Contrast to: • Chemical claims, where a fleeting “intermediate” produced in a chemical reaction is patentable.

  27. 27 Signal Claims Cont.d But Claims patentable for: • method to watermark signal (add the inaudible data) • Device to watermark signal • Storage medium containing watermarked signal

  28. 28 Signal Claims Cont.d Signals – Canadian Manual of Patent Office Practice The following claim would be acceptable: A carrier wave embodying a computer data signal representing sequences of statements and instructions which, when executed by a processor cause the processor to [list a specific function], the statements and instructions comprising the steps of: [list steps of method]

  29. 29 Where’s the dividing line? data structure Software control system software Hardware

  30. 30 Business Methods – U.S.A. • State Street Bank v. Signature Financial • data processing system for administering mutual funds • hub and spoke method • calculated final share price = useful, concrete & tangible result • was patentable • there is no “business methods” exclusion to patentability

  31. 31 Business Methods – U.S.A. Cont.d Business Methods (Revisited) In Re Cominskey (499 F.3d 1365 (Fed. Cir. 2007) A method for mandatory arbitration, including the steps of: • enabling a person to enrol; • Providing arbitration language; • Conducting arbitration resolution; • Determining an award or a decision that is final and binding

  32. 32 Business Methods – U.S.A. Cont.d Court held this was not patentable • Although the Patent Act says processes are patentable, the term “process” should not be read literally. • Idea or algorithm cannot be patented, even if it has practical application. • Routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima face case of obvious.

  33. 33 Business Methods – U.S.A. Cont.d In contrasts, earlier decisions held: • That methods are patentable some step scould be carried out with a human mind; or, • Even where a person performing the method had to think. (A.T.&T. Corp. v. Excel (Fed.Cir, 1999)) (In re Musgrave (1970))

  34. 34 Business Methods – U.S.A. Cont.d In re Bilski (2008) Claim for a method of hedging risk in the field of commodities trading: • Claims were admitted to not be limited to operation on a computer. • Is the process: • Tied to a particular machine or apparatus? • Transforms a particular article into a different state? • Producing useful, concrete and tangible resuls insufficient. • Held to be non-patentable subject matter

  35. 35 Methods of Doing Business - Europe • Per se, not patentable • Point of invention requires technical character • If the invention relates to a new or improved manner of conducting business, not technical so not patentable • If the invention can be characterized as having technical character and makes a technical contribution – improved processing technique for example, then may be patentable

  36. 36 Canada • Progressive Games, Inc. v. Canada (Comm. Patents) (2000) 9 C.P.R. (4th) 479 (F.C.A.) affirming (1999) 3 C.P.R. (4th) 517 (F.C.T.D.) • Method of playing poker • Is shuffling cards an “art”?

  37. 37 Approach of the Canadian Intellectual Property Office • Re: Application 564,175 toAtkins, Sep. 1999, (Comm. Patents) • Post Motorola • Applicant substitutes a computer programmed in a specific manner to make decisions which were formerly made by a financial advisor - professional skill • An operation which is not patentable when carried out by an individual cannot be made patentable merely by having it carried out by a computer

  38. 38 Professional Skills Not Patentable The exercise of professional skill is not patentable but invention may lie in systems for subdividing land. A complete description of the hardware, software and data structures and the interactions with the data will go a long way to establish patentable subject matter in a computing application. A full description of the hardware, program and data components in an integrated system, and an amended claim 12 defining the inventive features of the computer implementation of the method, may elevate the subject matter from a mere method belonging to a professional field into an art, process or machine of section 2 of the Patent Act.: Manual of Patent Office Procedure

  39. 39 Approach of the Canadian Intellectual Property Office Cont.d • Re Patent App. No. 2,203,302, Dec. 9, 2004 (Comm. of Patents) – Rankin Research Corp. • Vehicle tracking system using a cellular network to track a stolen vehicle. • Rejected by Examiner for requiring human intervention • PAB concludes human intervention limited to steps which are of a routine nature and do not require a high degree of training, judgment and decision making are permissible

  40. 40 Where’s the dividing line? Business methods software Software control system Hardware data structure

  41. 41 Closing Thoughts • Guidelines do not have the force of law “This manual is to be considered solely as a guide, and should not be quoted as an authority. Authority must be found in the Patent Act, the Patent Rules, and in decisions of the Courts interpreting them” • How much of this is a de facto obviousness analysis? • What is the law in Canada, when there is so little law in Canada?