Intellectual Property Boston College Law School March 26, 2008 Software – Patent

Gottschalk v. Benson Binary Coded Decimal 53 = “5” “3” Pure Binary Number 53 = The method of converting signals from binary coded decimal form into binary which comprises the steps of (1) storing the binary coded decimal signals in a re-entrant shift register, (2) shifting the signals to the right by at least three places, until there is a binary 1 in the second position of said register, (3) masking out said binary 1 in said second position of said register, (4) adding a binary 1 to the first position of said register, (5) shifting the signals to the left by two positions, ….

Cases After Benson Parker v. Flook (1978) –Method for updating alarm limits on computer to monitor pressure –Held unpatentable: nothing more than an algorithm Diamond v. Diehr (1981) –Method for curing rubber w/ steps calculated by computer –Held patentable: part of larger process, even if algorithm is the only new feature Freeman-Walter-Abele Test –(1) Does patent claim recite algorithm directly or indirectly? –(2) If so, is invention as a whole nothing more than algorithm?

State Street Bank v. Signature Pooled Mutual Fund A data processing system … comprising: (a) a computer processor means for processing data; (b) storage means for storing data …; (c) first means for initializing the storage medium; (d) second means for processing data regarding assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds’ assets and allocating the percentage share that each fund holds in the portfolio; ….

Software Patentability Requirements for Patentability –Subject Matter –Utility –Novelty –Nonobviousness –Enablement

Software Patents Issued by PTO

Nonobviousness Software difficulties –Lack of experienced patent examiners –No good classification system –No good body of documented prior art PTO efforts to address –Hiring experienced patent examiners –Cooperating w/ industry to document prior art –More involvement of industry in examination

Amazon v. Barnesandnoble Prior art references –Compuserve Trend (stock chart purchase) –Web Basket (shopping cart using cookies) –Yesil Book (ref. to “Instant Buy Option”) –Oliver’s Market (shopping cart) –‘780 Patent (web page delivery)

Hypothetical Facts –You have a programmer friend w/ software –Wants to market a program over the internet Questions –Does he need to worry about other patents? –Can he secure a patent himself?

Evaluation Arguments against –Increases costs of creating new programs Search costs Licensing costs Attorneys fees –Advantages large players over small players –Not necessary –PTO ill-equipped to issue Arguments for –No different from other industries –Becoming increasingly capital intensive (e.g. Windows) –PTO issues are transitional issues

Sui Generis Proposals Menell –Based on patent system: same requirements –Faster approval –Shorter duration –Privilege for reverse engineering –Compulsory licensing of standards Samuelson, et al. –Sui generis framework –Short period of anti-cloning protection –Registration and licensing system

Administrative Next Class –Start Trademark Read through VI.B – Subject Matter