1. - 1 - William Penn Chapter AIIM An Overview of Patents, and Computer- and Internet-Related Issues Presented by Steven Meyer, Esq. Woodcock Washburn LLP for the William Penn Chapter AIIM November 13, 2003

2. - 2 - William Penn Chapter AIIM Agenda ä What is and is not a Patent ä Purpose of a Patent ä What is Patentable ä What are the Parts of a Patent ä Process of Inventing and Getting a Patent

3. - 3 - William Penn Chapter AIIM Agenda ä Internet Access to Patents ä The Rest of the World ä Software-Related Patents ä Patent Information on the Internet

4. - 4 - William Penn Chapter AIIM What is not a Patent ä Copyrights -- protect expressions of ideas ä Trade Secrets -- anything that is kept secret by an entity for strategic or business advantage; only a secret as long as it is kept a secret. ä Trademarks -- anything that identifies source of origin of a good or service in commerce   ®

5. - 5 - William Penn Chapter AIIM What is a Patent ä A grant from the US government that allows patentee to prevent another from making, selling or using the invention as it is claimed in the patent ä A reference that is available to define the state of the art and to prevent others from patenting what is already known in the prior art.

6. - 6 - William Penn Chapter AIIM Purpose of a Patent ä Competitive advantage over competitors ä can’t make the patented invention ä can’t get their own patents ä Use patent as money-making device by selling or licensing patent ä Useful as “cross-licensing ammunition”

7. - 7 - William Penn Chapter AIIM What is Patentable ä Inventorship ä Utility ä Process, Machine, Manufacture, Composition of Matter ä Novelty ä Non-obviousness

8. - 8 - William Penn Chapter AIIM The Parts of a Patent ä Specification -- detailed description of preferred embodiments of invention ä Claims -- numbered paragraphs at end of patent -- set forth legal metes and bounds of patent right granted ä Drawings -- illustrate preferred embodiments of invention and show every element recited in claims

9. - 9 - William Penn Chapter AIIM Process of Inventing and Getting a Patent ä Do not assume what you are doing is NOT patentable. ä Get a patent attorney ä Disclose what you are doing in terms of structure and function ä Attorney can do patentability search

10. - 10 - William Penn Chapter AIIM Process of Inventing and Getting a Patent ä Based on search, attorney opines on patentability ä Decide whether to prepare and file patent application ä Patent attorney drafts patent application: claims, specifications, and drawing, and sends draft to inventor(s) / client

11. - 11 - William Penn Chapter AIIM Process of Inventing and Getting a Patent ä Based on feedback, attorney prepares final draft and sends out with formal papers: declaration and assignment ä Application filed with U.S. Patent & Trademark Office (PTO) in Washington, D.C.

12. - 12 - William Penn Chapter AIIM Process of Inventing and Getting a Patent ä Patent application can take 6-12 months OR MORE to receive substantive response (Office Action) -- computer- related applications can take longer. ä Office Action - written report from PTO with opinion on patentability based on prior art search for claimed invention ä Can allow / reject some or all claims

13. - 13 - William Penn Chapter AIIM Process of Inventing and Getting a Patent ä Applicant(s) respond to Office Action as necessary ä Hopefully, after some back-and-forth, claims and application are allowed

14. - 14 - William Penn Chapter AIIM Process of Inventing and Getting a Patent ä Patent is granted....... or not granted

15. - 15 - William Penn Chapter AIIM What about the Rest of the World? ä Most every other country in the world has a patent system AND many countries have joined multi- national patent organizations ä Under Paris Convention, can foreign-file US application in any signatory country or body (EPO, WIPO) ä Rules on patentability are similar, procedures can vary ä Examining vs. non-examining countries

16. - 16 - William Penn Chapter AIIM BUT ä US – first public disclosure of invention starts one-year grace period within which patent application must be filed (if not already), else BARRED ä Rest of World (for most part) – NO grace period, for most part – public disclosure without application on file is BAR

17. - 17 - William Penn Chapter AIIM Patent Cooperation Treaty ä Simplifies and reduces the cost of obtaining international patent protection ä Can file one PCT application to simultaneously seek protection for an invention in most countries ä Result is NOT a patent, but....

18. - 18 - William Penn Chapter AIIM Software-Related Patents ä Software-related inventions ARE patentable BUT only in certain formats ä NOT patentable: ä Method performed by computer WITHOUT any physical post-computational activity ä Data structure

19. - 19 - William Penn Chapter AIIM Software-Related Patents ä Patentable: ä Computer-readable medium with method thereon for being performed by computer, or with data structure ä Computer running method thereon ä The difference? Physicality vs. Etherealness

20. - 20 - William Penn Chapter AIIM Software-Related Patents ä Why Physicality? ä Longstanding ‘tradition’ that patents are for things you can see or touch, or for methods that produce things that you can see or touch ä For most of the 19 th century a U.S. patent application had to include a working model of the invention ä This has eased significantly -

21. - 21 - William Penn Chapter AIIM A Primer on Patentable Subject Matter ä Section 101 of the Patent Statute - Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor...

22. - 22 - William Penn Chapter AIIM BUT ä Body of case law beginning in the 19 th century established as NOT PATENTABLE inventions amounting to: ä Mathematical Algorithms ä Business Methods ä Initially, many software-related patent applications were rejected on both of these bases

23. - 23 - William Penn Chapter AIIM HOWEVER ä New View - ä “ANYTHING UNDER THE SUN THAT IS MADE BY MAN” can be the basis for patentable subject matter Chakrabarty, 447 U.S. 303 (1980) ä The Harvard Mouse case ä NOT MADE BY MAN - “LAWS OF NATURE, NATURAL PHENOMENA, AND ABSTRACT IDEAS” Diehr, 450 U.S. 175 (1981)

24. - 24 - William Penn Chapter AIIM In re Alappat ä 33 F.3d 1526 (Fed. Cir. 1994) (in banc) ä The first crack in the dam ä The technology at issue: A way to create a smooth waveform display in a digital oscilloscope. To overcome the jaggedness caused by the limited resolution of a CRT display, Alappat's invention provided an algorithm for properly setting the illumination intensity of display pixels.

25. - 25 - William Penn Chapter AIIM Holding: ä The Court of Appeals reversed the Patent Office rejection of the claim under § 101 as being directed to a mathematical algorithm. ä Recited claim limitations represented elements that performed a mathematical algorithm, BUT the claimed invention as a whole was directed to a combination of interrelated elements which combine to form a “new machine.”

26. - 26 - William Penn Chapter AIIM In Summary: ä An old computer is a “new machine” if it is programmed in a new way. ä Such a “new machine” is patentable subject matter, even if the novelty is tied to a mathematical algorithm, if it produces a “useful, concrete and tangible result.”

27. - 27 - William Penn Chapter AIIM State Street Bank & Trust Co. v. Signature Financial Group, Inc. ä 149 F.3d 1368 (Fed. Cir. 1998) ä The dam breaks ä Patent Claims - Directed to “Hub and Spoke” Financial System that allows several mutual fund “spokes” to pool their resources in a single portfolio “hub”

28. - 28 - William Penn Chapter AIIM Court’s Finding: ä “[T]he transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces 'a useful concrete and tangible result' -- a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.”

29. - 29 - William Penn Chapter AIIM HOLDING ä “[C]ertain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, i.e., 'a useful, concrete, and tangible result.'”

30. - 30 - William Penn Chapter AIIM ALSO ä The Business Method Exception Is DEAD

31. - 31 - William Penn Chapter AIIM SO – ä A software-related inventions can be the basis for patentable subject matter if USEFUL as a practical application of technology: ä Production of a smooth waveform on a rasterizer monitor. In re Alappat ä Transformation of electrocardiograph signals from a patients heartbeat. State Street Bank

32. - 32 - William Penn Chapter AIIM BUT ä Courts and the PTO have interpreted State Street Bank and Alappat as still requiring software-related claims to recite something physical or something that produces a physical result

33. - 33 - William Penn Chapter AIIM Software-Related Patents ä Real-World Reason for Physicality ä An almost irrational animosity to patent applicants that don’t really ‘make’ anything yet make oodles of money doing it – the Microsofts of the world ä This despite the fact that the Microsofts are much more likely to be patent defendants than plaintiffs

34. - 34 - William Penn Chapter AIIM Software-Related Patents ä Animosity in PTO patent examination process ä Weak rejections based on type of subject matter ä Weak rejections where the Examiner can only say the claims are ‘too broad’ ä Rejections where rationale is that ‘any computer can be programmed to do that’ ä Fortunately, most of these rejections can be overcome, but takes time and money

35. - 35 - William Penn Chapter AIIM Software-Related Patents ä NEVERTHELESS ä Microsoft has almost 3000 US patents, most relating to software ä Microsoft intends to file 1800 US patent applications this fiscal year

36. - 36 - William Penn Chapter AIIM Software-Related Patents ä US vs. Rest of World – ä US – PTO and Courts have grudgingly allowed computer-related inventions to be patentable, and only in last 5-10 years or so ä Rest of World – still significant pockets of incredible hostility to computer-related inventions, almost to point of irrationality

37. - 37 - William Penn Chapter AIIM US Patent Info on Internet ä http://www.patentfetcher.com/ http://www.patentfetcher.com/ ä http://www.uspto.gov/patft/index.html http://www.uspto.gov/patft/index.html ä Can search by Patent Number, Inventor, Assignee, Title, Abstract, Claims, Agent, etc.

38. - 38 - William Penn Chapter AIIM World Patent Info on Internet ä http://ipdl.wipo.int/ http://ipdl.wipo.int/ ä From the World Intellectual Property Organization ä http://ep.espacenet.com/ http://ep.espacenet.com/ ä From the European Patent Office

39. - 39 - William Penn Chapter AIIM A Word of Caution ä Could be charged with ‘knowledge’ of any patent you find from searching on the Internet or elsewhere ä IF you ‘know’ of a patent AND you are found to infringe AND your knowledge of the patent while infringing is proven, could be liable for WILLFUL infringement – monetary damages could be trebled

40. - 40 - William Penn Chapter AIIM Questions???