1. Kristen Jakobsen Osenga University of Richmond School of Law Bilski and Beyond: Changing IP for the Information Age

3. Overview  Other Notable Subject Matter Cases  Implications for Business Methods, Software & Tax Inventions Image courtesy of Stock.xchng

4. Other Notable § 101 Cases  In re Nuijten (CAFC)  In re Ferguson (CAFC, SCT)

5. In re Nuijten  500 F.3d 1346 (CAFC 2007, cert denied 2008)  Method for introducing watermark into signals with reduced distortion – allowed  Storage medium with method – allowed  Signal encoded via claimed method - rejected Image courtesy of Stock.xchng

6. In re Nuijten  Examiner, BPAI reject signal claim  CAFC (JJ. Gajarsa, Linn, Moore) Majority:  “A transitory, propagating signal... is not a ‘process, machine, manufacture, or composition of matter.’”  Process = steps, machine = made of parts, manufacture = must be tangible Dissent (J. Linn)  Article of manufacture (made by man)

7. In re Ferguson  558 F.3d 1359 (CAFC 2009)  Method of marketing a product, comprising: Developing a shared marketing force; Using shared marketing force to market plurality of products from plurality of companies; Obtaining share of total profits from each of plurality of companies; and Obtaining an exclusive right to market each of plurality of products.

8. In re Ferguson  A paradigm for marketing software, comprising: A marketing company that markets software from a plurality of different... software companies, and carries out and pays for operations associated with marketing of software for all of said different... software companies…

9. In re Ferguson  Examiner rejected under other patentability requirements, BPAI raised § 101  CAFC (JJ. Newman, Mayer, Gajarsa) Method claims fail Bilski’s machine-or- transformation test Paradigm claims are not drawn to any of the four statutory categories, but rather abstract idea J. Newman concurs in result, but for § 103 reasons, not subject matter eligibility

10. In re Ferguson  Petition for writ of certiorari filed June 2, 2009 Are claims that recite business methods unpatentable per se when they are not tied to a machine and do not preempt any mathematical algorithm? Is a claim unpatentable under § 101 as being an abstract idea because it does not come within the machine-or-transformation test? Image courtesy of Stock.xchng

11. Implications for business methods, software, & tax What do we do now??? Image courtesy of Stock.xchng

12. What are the courts making of this?  Some district court cases, many BPAI cases  Compilation of post-Bilski and other subject matter-based opinions available at www.aipla.org/MS/ElectronicandComputerLaw  Take-away lessons?

13. Fort Properties Inc. v. American Master Lease (C.D. Cal. 1/22/09)  Method for creating real estate investment instrument Aggregating real property, encumbering property, creating plurality of deedshares by dividing title  PTO ok’s under State Street (useful, concrete, tangible), ct kills under Bilski (machine-or- transformation) Need not be performed by machine Manipulates only legal ownerships (not physical)

14. Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)  Method & Beauregard claims  A method for verifying credit card transaction over the Internet Obtaining information about other transactions; Constructing a map of credit card numbers based on other transactions; and Utilizing map to determine if transaction is valid. Image courtesy of Stock.xchng

15. Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)  No transformation Credit card numbers are not physical or representations Abstraction only – relationship between card holder and card issuer  No machine “Over the internet” does not tie to a particular machine Internet = abstraction, no meaningful limit Image courtesy of Stock.xchng

16. Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)  Computer readable medium containing program instructions for detecting fraud in a transaction... over the internet, wherein execution of the program instructions by one or more processors causes one or more processors to carry out the steps of:  Obtaining credit card information  Verifying based on plurality of parameters  … Image courtesy of Stock.xchng

17. Cybersource Corp. v. Retail Decisions (N.D. Cal. 3/27/09)  No exemption from Bilski test for Beauregard-type claims  Programmed computer (generality) = not machine  Process steps = not transformation Image courtesy of Stock.xchng

18. Every Penny Counts Inc. v. Bank of America Corp. (M.D. Fla. 5/27/09)  System (for payors to donate) comprising: A network; Entry means coupled to network; Identification entering means in entry means & coupled to network; Said network having computing means  Having data concerning payor  Being responsive to data about payment  Apportioning excess payment

19. Every Penny Counts Inc. v. Bank of America Corp. (M.D. Fla. 5/27/09)  System = process for § 101 purposes (???) “Simply because the process at issue requires machine or computers to work, however, does not mean that the process or system is a machine.” No transformation, no machine = not eligible for patenting Image courtesy of Stock.xchng

20. A Sampling of Cases from the Board

21. BPAI Case Sampler – Algorithms  Ex parte Cornea-Hasegan ( 2008-4742, 1/13/09 ) Method for predicting result of floating point mathematical operations & calculating results  No machine (general processor, unspecified programming)  No transformation (just numbers)  “A computer readable media” including program for predicting result…= article of manufacture, but fails under Bilski

22. BPAI Case Sampler - Machines  Ex parte Uceda-Sosa (2008-1632, 11/18/08) Method of representing information Middleware module to represent & store information  A library having a module to generate an information container, said module allowing for (the claimed method) An apparatus to represent & store information  A storage unit containing a library having a module to generate information container, said module allowing for (method) A signal-bearing medium tangibly embodying a program of machine readable instructions to perform the claimed method

23. BPAI Case Sampler - Machines  Method claim fails machine-or-transformation  Middleware claim fails because functionally descriptive “[M]odule is simply a computer software module that is used to represent and store information... However, the claimed software module is not tangibly embodied on a computer-readable medium [and is therefore functional descriptive material].  Apparatus claim are §101 subject matter  Signal claim fails under Nuijten

24. BPAI Case Sampler - Software  Ex parte Seshadri (2008-2854, 2/27/09) A computer implemented notification system comprising the following computer executable components:  A component executing on a computer…  A database engine…; and  A notification server… Examiner said software per se; BPAI says no  Claims recite “a component executing on a computer”, not software per se (OK under§ 101)

25. BPAI Sampler – Computer Media  Ex parte Bo Li (2008-1213, 11/6/08) Computer usable medium having computer readable program embodied thereon BPAI reverses examiner’s § 101 rejection  Nuijten does not remove validity of Beauregard claims Image courtesy of Stock.xchng

26. BPAI Sampler – Computer Media  Ex parte Kumar (2008-1649, 11/19/08) Tangible computer accessible medium, comprising software instructions executable to implement BPAI doesn’t act under § 101, but cautions that a “computer readable medium comprising a modulated signal” may not be statutory subject matter post-Nuijten Image courtesy of Stock.xchng

27. BPAI Sampler – Computer Media  Ex parte Brubacher (2008-1508, 1/22/09) Computer-readable medium having computer- executable instructions… BPAI upholds examiner’s § 101 rejection because “computer-readable medium having computer- executable instructions” encompasses signals, not subject matter per Nuijten Image courtesy of Stock.xchng

28. BPAI Sampler – Computer Media  Ex parte Salesin (2008-2578, 5/22/09) Computer-readable medium having computer- executable instructions… BPAI initiates § 101 rejection  “[A] computer readable medium includes a signal embodied in a carrier wave. A signal embodied in a carrier wave is not statutory subject matter because it does not fall within any of the four categories of statutory subject matter. See In re Nuijten.” Image courtesy of Stock.xchng

29. BPAI Sampler – Data Structures  Ex parte Hoya (2008-0024, 2/26/09) A memory system adapted to model physiological functions…comprising:  A short-term memory neural network unit; and  A long-term memory neural network unit… Not statutory subject matter under Bilski and Nuijten because claim can cover embodiment lacking tangible structure

30. BPAI Sampler – Data Structures  Ex parte Klosterman (2008-1649, 4/20/09) A computer program product for use in an information handling system…comprising a plurality of instructions BPAI initiates § 101 rejection  A ‘computer program product’ does not fall within any of the four classes of § 101. … These claims recite a ‘computer program product’ data structure…There is no claim language... which defines any structural and functional interrelationship between the data structure and the computer.

31. BPAI Sampler – Refining Bilski  Ex parte Sesek (2009-0458, 3/25/09) Method of notifying a mail carrier of anticipated load by monitoring mail, producing a forecast, notifying mail carrier of forecast, and notifying of changes Not tied to a machine Not a transformation, does not transform mail or any article  Transmits a forecast, not physical or representation Image courtesy of Stock.xchng

32. BPAI Sampler – Refining Bilski  Ex parte Harris (2007-0325, 1/13/09) Method of conducting an auction over a network  Allowing users to submit bids over network  Collecting bids on server  Defining secret rules for auction Not machine  Network, server not specified electronic, could be human (and not limited) Not a transformation (data isn’t physical) Image courtesy of Stock.xchng

33. BPAI Sampler – Refining Bilski  Is it AND or OR? Ex parte Becker (2008-2064, 1/26/09)  “To the extent that Appellants’ claims may transform data, we note that transformation of data, without a machine, is insufficient to establish patent eligibility under § 101.” Image courtesy of Stock.xchng

34. BPAI Sampler – None of the Four  Ex parte Daughtrey (2008-0202, 4/8/09) A user interface…comprising a fare evaluation result table.  “User Interface” is not one of the four categories  Ex parte Johnson (2009-0470, 6/10/09) A network collaboration tool... comprising web browser software, a graphical collaboration tool, and a server process  “Network collaboration tool” is not one of the four

35. Pointy Headed Thoughts  What’s wrong with Bilski “Problems” with business method patents How they should handle the problems  Special issues for tax methods Image courtesy of Stock.xchng

36. Take Away Lessons? (from scratch)  Add a machine [method step ] “by a programmed computer” Make sure there’s support in the spec for exemplary hardware  Use non-signal computer readable media “storage devices”  Multi-format claims Machine, process, article of manufacture

37. Take Away Lessons? (pending/issued)  Add a machine and/or non-signal computer readable media…if you can Support in spec is great Inherency/PHOSITA argument if not  Tougher path but it could work  Potential for reissue? New interpretation of § 101 can help meet reissue standard (invalid because patentee claimed more or less than he had a right to do so)