IP: Revenge of the Humans—Defending Business Method Patents
A recent circuit court decision gives companies the teeth with which to bite back.
August 30, 2011 at 08:33 AM
6 minute read
The original version of this story was published on Law.com
Software patents. Business method patents. The words alone make me clutch my wallet. Easy to get. Costly to defend. And too often just plain absurd.
I remember defending a case involving a software patent on a method of updating address book contacts by emailing people and asking them for their current information. Really? I could do that with a telephone and pencil. Another favorite was a case involving a method of inducing people to watch more TV commercials by making them more interesting. Again, really? Isn't that just a matter of better writing and directing? But both patents used a computer for some thing or another, which allowed the plaintiff to argue that the inventions were “tied to” a machine and, therefore, satisfied the machine-or-transformation test used to determine patent-eligible subject matter.
Tied to? I always liked that one. What the heck does that mean? No one really knew even before the Supreme Court made matters worse by downgrading the machine-or-transformation test from a “test” to a mere “clue,” or rather “the clue,” as the Court so helpfully emphasized, thank you very much. And so, if I discover a new way to San Jose that shaves an hour and passes a good delicatessen, I can get a patent simply by reciting a “vehicle with propulsion means” in my claims.
Not anymore.
On Aug. 16, 2011, the Federal Circuit gave the machine-or-transformation test—excuse me, “clue”—some real teeth. In Cybersource v. Retail Decisions, the court affirmed a judgment invalidating a patent on a method of detecting Internet credit card fraud by comparing credit card transactions with IP addresses. Although countless machines—personal computers, servers, etc.—were inherently involved, the claims could literally be infringed by a human being using a pencil and scratch pad, no matter how inefficient or herculean the task.
The decision is important for at least two reasons: First, the court created a clear rule that businesses, the bench, and the bar can understand and apply. If you can practice the claimed method without the claimed machine, then the claimed machine is irrelevant and the claimed method isn't patentable. That's a good rule. Countless business method and software patents recite methods of doing things that can be done—perhaps not easily or even practically—without computers, and now these patents are invalid.
Second, the court put the kibosh on what is known as Beauregard claims. A Beauregard claim is a way of circumventing the prohibition against patenting naked algorithms simply by saying you're not patenting the instructions, but rather a “computer readable medium” that can execute them. It's a goofy form of claim with a highly questionable pedigree, and district courts have long been perplexed about how to treat them. But in Cybersource, the Federal Circuit said, “No more.” You can't get a patent on naked algorithms simply by claiming the computer disk on which they are stored. Sounds obvious, but now it's the law.
The next time your company stares down the barrel of a software or business method patent, ask if the claimed method can be performed by a human being without the claimed machine. You might need to be a Kasparov to do it, but that's still checkmate against the plaintiff.
Software patents. Business method patents. The words alone make me clutch my wallet. Easy to get. Costly to defend. And too often just plain absurd.
I remember defending a case involving a software patent on a method of updating address book contacts by emailing people and asking them for their current information. Really? I could do that with a telephone and pencil. Another favorite was a case involving a method of inducing people to watch more TV commercials by making them more interesting. Again, really? Isn't that just a matter of better writing and directing? But both patents used a computer for some thing or another, which allowed the plaintiff to argue that the inventions were “tied to” a machine and, therefore, satisfied the machine-or-transformation test used to determine patent-eligible subject matter.
Tied to? I always liked that one. What the heck does that mean? No one really knew even before the Supreme Court made matters worse by downgrading the machine-or-transformation test from a “test” to a mere “clue,” or rather “the clue,” as the Court so helpfully emphasized, thank you very much. And so, if I discover a new way to San Jose that shaves an hour and passes a good delicatessen, I can get a patent simply by reciting a “vehicle with propulsion means” in my claims.
Not anymore.
On Aug. 16, 2011, the Federal Circuit gave the machine-or-transformation test—excuse me, “clue”—some real teeth. In Cybersource v. Retail Decisions, the court affirmed a judgment invalidating a patent on a method of detecting Internet credit card fraud by comparing credit card transactions with IP addresses. Although countless machines—personal computers, servers, etc.—were inherently involved, the claims could literally be infringed by a human being using a pencil and scratch pad, no matter how inefficient or herculean the task.
The decision is important for at least two reasons: First, the court created a clear rule that businesses, the bench, and the bar can understand and apply. If you can practice the claimed method without the claimed machine, then the claimed machine is irrelevant and the claimed method isn't patentable. That's a good rule. Countless business method and software patents recite methods of doing things that can be done—perhaps not easily or even practically—without computers, and now these patents are invalid.
Second, the court put the kibosh on what is known as Beauregard claims. A Beauregard claim is a way of circumventing the prohibition against patenting naked algorithms simply by saying you're not patenting the instructions, but rather a “computer readable medium” that can execute them. It's a goofy form of claim with a highly questionable pedigree, and district courts have long been perplexed about how to treat them. But in Cybersource, the Federal Circuit said, “No more.” You can't get a patent on naked algorithms simply by claiming the computer disk on which they are stored. Sounds obvious, but now it's the law.
The next time your company stares down the barrel of a software or business method patent, ask if the claimed method can be performed by a human being without the claimed machine. You might need to be a Kasparov to do it, but that's still checkmate against the plaintiff.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllFTC Settles With Security Firm Over AI Claims Under Agency's Compliance Program
6 minute readPeople and Purpose: AbbVie's GC on Leading With Impact and Inspiring Change
7 minute readDigging Deep to Mitigate Risk in Lithium Mine Venture Wins GM Legal Department of the Year Award
5 minute readTrending Stories
- 15th Circuit Rules Open-Source Code Is Not Property in Tornado Cash Appeal
- 2Mediators for the Southern District of New York Honored at Eighth Annual James Duane Awards
- 3The Lawyers Picked by Trump for Key Roles in His Second Term
- 4Pa. High Court to Weigh Parent Company's Liability for Dissolved Subsidiary's Conduct
- 5Depo-Provera MDL Could Be Headed to California
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250