1. Comments on “Claimable Aspects of Software- Implemented Business Methods” by Professor Andrew Chin Margo A. Bagley Associate Professor of Law Emory University School of Law Atlanta, Georgia

2. Key Insights from “Claimable Aspects” 1. Identifying differences between formal and informal claims treated the same by pending legislation 2. Anomalous higher patentability standard for formal claims 3. Potential for obtaining true monopoly, more valuable patents via informal or “essential use” (“EU”) claims Potential Issues Enhanced Patent Value

3. Business Method or Business Idea? EU claim can encompass an entire software product market EU claim can encompass an entire software product market Not limited to any particular implementation method Not limited to any particular implementation method “Method” is at such a high level of abstraction, appears to be a claim to an idea “Method” is at such a high level of abstraction, appears to be a claim to an idea

4. Business Method or Business Idea? “The laws of nature, physical phenomena, and abstract ideas have been held not patentable.... Thus, a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are ‘manifestations of... nature, free to all men and reserved exclusively to none.” Diamond v. Chakrabarty (USSC 1980) “The laws of nature, physical phenomena, and abstract ideas have been held not patentable.... Thus, a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are ‘manifestations of... nature, free to all men and reserved exclusively to none.” Diamond v. Chakrabarty (USSC 1980)

5. Business Method or Business Idea? “The emphasis on the commercial function of the program... together with the complete generality of the hardware and software elements... leads to the conclusion that this is a patent on the business idea of using computers, in particular the Internet, to price and purchase options on airline tickets.” Prof. R. Merges (discussing Priceline.com’s airline ticket auction patent) “The emphasis on the commercial function of the program... together with the complete generality of the hardware and software elements... leads to the conclusion that this is a patent on the business idea of using computers, in particular the Internet, to price and purchase options on airline tickets.” Prof. R. Merges (discussing Priceline.com’s airline ticket auction patent)

6. Business Method or Business Idea? Some abstract ideas are now patentable Some abstract ideas are now patentable Consistent with ever-expanding scope of patent-eligible subject matter Consistent with ever-expanding scope of patent-eligible subject matter

7. Prosecution Issues with EU Claims Enablement, written description Enablement, written description Prior Art Prior Art

8. Sample “1-Click” EU Claim A method of allowing a user to purchase an item, comprising: A method of allowing a user to purchase an item, comprising: Displaying the item to a purchaser; Displaying the item to a purchaser; Allowing the purchaser to identify himself or herself; Allowing the purchaser to identify himself or herself; Allowing the purchaser to order the item; Allowing the purchaser to order the item; Receiving a request from the purchaser to identify himself or herself and to order the item, wherein only one purchaser action is required to cause the request to be received; Receiving a request from the purchaser to identify himself or herself and to order the item, wherein only one purchaser action is required to cause the request to be received; Retrieving previously stored information regarding the purchaser; Retrieving previously stored information regarding the purchaser; Generating a purchase order; and Generating a purchase order; and Fulfilling the purchaser order. Fulfilling the purchaser order.

9. Sample “1-Click” EU Claim More likely to be obvious in view of analogous “real world” transactions, for example, More likely to be obvious in view of analogous “real world” transactions, for example, frequent hotel guest frequent hotel guest regular customer in informal store regular customer in informal store

10. Enhancing Patent Value? EU’s allow functional claiming without the limits of 35 U.S.C. 112, p6 EU’s allow functional claiming without the limits of 35 U.S.C. 112, p6 Not limited to means disclosed in the specification Not limited to means disclosed in the specification Broader claims (easier to infringe) Broader claims (easier to infringe)

11. Enhancing Patent Value? EU claims more likely to be infringed EU claims more likely to be infringed Claims are functional, cover plethora of implementation forms Claims are functional, cover plethora of implementation forms Not limited to disclosure in specification Not limited to disclosure in specification Easier to establish literal infringement Easier to establish literal infringement Need not resort to Doctrine of Equivalents Need not resort to Doctrine of Equivalents

12. Enhancing Patent Value? Non-Structural Barriers to Entry: Non-Structural Barriers to Entry: sticky features may give an advantage to first entrant: sticky features may give an advantage to first entrant: Customer resistance to learning new interface Customer resistance to learning new interface Customer reluctance to re-enter personal data on a new site Customer reluctance to re-enter personal data on a new site

13. Conclusion EU claims can enhance patent value and create a true monopoly if issues of enablement, prior art can be overcome. EU claims have additional benefits in infringement analysis and may enable creation of non-structural barriers to entry. However, EU claims seem more likely to stifle innovation. EU claims can enhance patent value and create a true monopoly if issues of enablement, prior art can be overcome. EU claims have additional benefits in infringement analysis and may enable creation of non-structural barriers to entry. However, EU claims seem more likely to stifle innovation.