IP Intelligence

IP Intelligence

Insight on Intellectual Property

USPTO Memo re Enfish v. Microsoft

The word patent highlighted in a dictionary

This is an update to my recent article about the Federal Circuit’s decision in Enfish v. Microsoft.

In a memo to the Patent Examining Corps dated May 19, 2016, Deputy Commissioner Robert Bahr said that the Enfish decision provides “additional information and clarification on the inquiry for identifying abstract ideas.” The gist of the memo is that when performing an analysis of whether a claim is directed to an abstract idea, examiners should continue to determine if the claim recites a concept similar to concepts previously found abstract by the courts. In addition, the fact that a claim is directed to an improvement in computer-related technology can demonstrate that the claim does not recite a concept similar to previously identified abstract ideas.

Of importance to applicants and practitioners in the software field, the memo noted that to make the determination of whether the Enfish claims were directed to an improvement in existing computer technology, the court looked to the teachings of the specification; specifically, the court identified the specification’s teachings that the claimed invention achieves other benefits over conventional databases, such as increased flexibility, faster search times and smaller memory requirements. It was noted that the improvement does not need to be defined by reference to “physical” components, but instead could be defined by “logical structures and processes.”

I believe that software patents can be strengthened against Alice attacks by including descriptions of structural (as opposed to functional) features of the inventive software. Such structural features can include “program structures” and “data structures.” Examples of program structures include structures such as program loops, neural network and other architectural aspects. Data structures can include trees, graphs, link lists, arrays, etc. These structures can be effectively used to constrain the claim scope sufficiently to avoid invalidation based on the abstract idea exception.

For further reading on the use of structural claim limitations in software patents, see my article here.

Comparing the Defend Trade Secrets Act and the Uniform Trade Secrets Act

trade secrets text - file cabinet label, bronze holder against grunge and scratched wood

As we have previously discussed on the blog, President Obama signed the Defend Trade Secrets Act (DTSA) into law on May 11, 2016. Fortunately, while the law has many new components that businesses need to consider, parts of the DTSA are derived from the Uniform Trade Secrets Act (UTSA). The UTSA has been adopted, in various forms, by 47 states to date. Therefore, there is a large body of state law that has developed on the UTSA that may be applicable to the DTSA. This latest blog entry in our series on the DTSA analyzes some of the differences and similarities between the DTSA and UTSA, specifically the acts’ “trade secrets” and “misappropriations” definitions and their statutes of limitations.

I. “Trade Secret” Definition

The UTSA and DTSA have similar but slightly different definitions of “trade secrets”:

UTSA Trade Secret Definition

§ 1(4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

DTSA Trade Secret Definition

18 U.S.C. § 1839(3) as amended by § 2(b)(1) of DTSA

(3) the term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—

(A) the owner thereof has taken reasonable measures to keep such information secret; and

(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information;

Continue Reading

Supreme Court to Consider Patent Laches in Wake of Copyright Laches Decision

When we last discussed patent laches here, the Federal Circuit had voted to rehear, en banc, SCA Hygiene Products’ patent infringement claim, which invoked a laches defense. At that time, the Supreme Court had recently decided in Petrella v. Metro-Goldwyn-Mayer, Inc.[1] that laches was not a defense to a copyright infringement claim brought within the codified statute of limitations. The en banc Federal Circuit subsequently ruled in SCA Hygiene last September that, despite Petrella’s copyright holding, laches is still a viable bar to legal relief in patent cases.

Laches is an equitable defense to a claim that is available if an unreasonable delay in asserting the claim has unfairly prejudiced the party being sued. In the patent infringement context, this might include a patentee’s allowing damages to accrue before bringing a patent infringement suit against an infringer that might have otherwise stopped infringing had it been notified in a timely manner. Laches is a common-law defense that has long been available to alleged infringers, but the Supreme Court has decided to consider whether the Federal Circuit correctly ruled that it applies to bar legal damages in the patent context despite the Court’s holding in Petrella.

In Aukerman,[2] the en banc Federal Circuit had previously ruled that laches does apply as a defense to a claim for patent infringement damages. The question presented in the SCA Hygiene case is as follows: “Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period, 35 U.S.C. § 286.” Continue Reading

Major 101 Decision – Enfish v. Microsoft

Today in Enfish v. Microsoft, the Federal Circuit held software claims patent eligible, reversing the district court’s grant of summary judgment on 101. This is a major decision because it is only the second since Alice where the Federal Circuit has held patent claims eligible (DDR being the first). Further, the case heavily emphasizes that disembodied software can be patent eligible when it provides improvements to specific computer technology. This decision should quickly become a go-to case for software patent owners facing 101 challenges.

Judge Hughes wrote for a unanimous panel, including Judges Moore and Taranto, which adds some additional interest, because in his brief time on the Court thus far, Judge Hughes has been fairly tough on patents and tough on the 101 issue in particular. At a high level, the Court decided the issue on the first Alice prong, holding that the claims were not directed to an abstract idea. The patent at issue concerns self-referential tables. The Court characterized the patent-in-suit as follows:

The ’604 and ’775 patents are directed to an innovative logical model for a computer database. A logical model is a model of data for a computer database explaining how the various elements of information are related to one another. A logical model generally results in the creation of particular tables of data, but it does not describe how the bits and bytes of those tables are arranged in physical memory devices. Contrary to conventional logical models, the patented logical model includes all data entities in a single table, with column definitions provided by rows in that same table. The patents describe this as the “self-referential” property of the database. ’604 patent, col. 2 ll. 44–52. Continue Reading

USPTO Releases Next Iteration of Examiner Guidance on Patent Subject Matter Eligibility

On May 5, 2016, the USPTO released an update to its examiner guidance on patent subject matter eligibility. The update includes a new set of life science examples, a memorandum to the patent examining corps with instructions on formulating subject matter eligibility rejections and responding to applicants’ replies, an index of eligibility examples, and an appendix of subject matter eligibility court decisions. All related documents can be viewed on the Subject Matter Eligibility page of the USPTO website.

In this article, I will briefly outline the new aspects of the examiner guidance, particularly as it relates to the abstract idea exception. The new examples are designed to help patent applicants and patent examiners resolve subject matter eligibility issues in the life science areas, including vaccines and diagnostics. The specific examples will be reviewed in a separate article.

By way of background, in July 2015, the USPTO issued an update to the patent subject matter eligibility guidance to assist examiners in evaluating claims under 35 U.S.C. § 101, in view of the U.S. Supreme Court’s decisions in Alice Corp., Myriad, and Mayo. This new update was prepared in view of public comments and feedback from the patent examining corps. The intent of the guidance (and subsequent examiner training[1]) is “to promote greater consistency throughout the patent examining corps in evaluating whether the claimed subject matter is eligible for patenting, more thorough Office Actions, and greater assurance that applicant responses are thoughtfully considered by the examiner in determining whether to maintain a subject matter eligibility rejection.”[2] Continue Reading

Full House Passes Defend Trade Secrets Act

On April 27, the full House of Representatives passed the federal Defend Trade Secrets Act (“the Act”) by an overwhelming vote of 410-2. As we have previously blogged, the Act is likely to be signed by the president and become law for any trade secret misappropriation that occurs after the Act is passed. In the coming weeks, we will provide in-depth analysis of the Act’s provisions and the changes that will need to be made to written employment policies, nondisclosure policies, and litigation strategy. Here are some of the key points: Continue Reading

Amended PTAB Rules to Take Effect on May 2, 2016

On May 2, 2016, amended rules governing post-grant proceedings before the Patent and Trial Appeal Board (“PTAB”), including inter partes review (“IPR”), post-grant review (“PGR”), and covered business methods (“CBM”), will take effect. The rules apply to all currently pending and future proceedings before the PTAB.

The primary amendments are:

Testimonial Evidence Permitted in Patent Owner Preliminary Response

Previously, patent owners could not submit testimonial evidence, such as expert declarations, until after the institution of the post-grant proceeding. As amended, the rules permit submission of testimonial evidence with the preliminary response. The rules also allow petitioners to seek leave to file a reply to the preliminary response upon a showing of good cause. The amended rules note, however, that any genuine issues of material fact resulting from the testimonial evidence will be resolved in favor of the petitioner. Continue Reading

Patent Drafting Post-Alice: Broadly Define the Problem, and Narrowly Claim the Solutions

The notion of strategic claim drafting, which experienced patent practitioners understand, is all about writing specific, narrowly defined claims to cover the strategically important “choke points” in a value chain.[1] The rationale is that the narrowness of the claim makes it less vulnerable to a validity attack on prior art grounds. In the discussion below, I first review the recent decision in SRI International Inc. v. Cisco Systems Inc., and then I discuss how a similar strategically narrow drafting approach can be effective in diverting a § 101 attack on claims directed to software-related inventions.

In SRI International Inc. v. Cisco Systems Inc.,[2] the court denied defendant’s motion for summary judgment that the asserted claims of plaintiff’s network security patents encompassed unpatentable subject matter, and found that the claims were not directed to an abstract idea. The patents in suit, U.S. Patent Nos. 6,711,615 (the ’615 patent) and 6,484,203 (the ’203 patent), relate to the monitoring and surveillance of computer networks for intrusion detection. In particular, the patents teach a computer-automated method of hierarchical event monitoring and analysis within an enterprise network that allows for real-time detection of intruders. Upon detecting any suspicious activity, the network monitors generate reports of such activity. The claims of the patents focus on methods and systems for deploying a hierarchy of network monitors that can generate and receive reports of suspicious network activity. For example, independent claims 1 and 13 of the ’615 patent read as follows: Continue Reading

House Judiciary Committee Passes Defend Trade Secrets Act

Wow, that was fast! We recently blogged about the revised Defend Trade Secrets Act, which passed the Senate on April 4, 2016, by an 87-0 vote. On April 20, the House Judiciary Committee unanimously passed the same bill. The next step is for the full House to consider the bill, and then it goes on to the president’s desk. This is expected to happen quickly.

As we reported, one controversial aspect of the bill is its provision for ex parte seizure of “property necessary to prevent the propagation or dissemination of the trade secret.” Amendments made to the original bill by the Senate were intended to address the concern that this remedy could be abused. The amendments included making the remedy available only in “extraordinary circumstances,” placing limits on the scope of the seizing official’s authority, and expressly stating that any injunction issued under the act may not conflict with applicable state law prohibiting restraints on employment.  Continue Reading

Epic Verdict in Trade Secrets Case

Last week, a federal jury in Wisconsin awarded almost $1 billion to Epic Systems Corporation in its trade secrets case against Indian consulting company Tata Consulting Services, Ltd., and its American unit, Tata America International Corporation. Epic provides software for medical groups, hospitals, and integrated health care organizations. Tata was hired by one of Epic’s customers, Kaiser Permanente, to provide consulting services in connection with the Epic software. A whistle-blower alerted Epic in 2014 that TCS employees were accessing Epic’s computer network without authorization, and using the information obtained to assist Tata in the development of competing software.  Continue Reading