(as published in Today's General Counsel)
Despite the doom and gloom about the difficulty of patenting software in today's legal landscape, there are still ways for software companies to protect their intellectual property. This article will discuss concrete and practical strategies for prosecuting existing cases to successful and timely completion, as well as strategies for preparing cases yet to be filed, so that they will withstand heightened scrutiny resulting from the new U.S. Patent & Trademark Office tests for determining patentable subject matter. We will also provide a brief overview of recent relevant cases.
In 2012, the U.S. Supreme Court started a line of cases that dramatically shifted the definition of which subject matter inventors can protect with patents—effectively narrowing the types of ideas that the patent system can protect. For software and business methods, the line of cases culminated in the Alice Corp. decision that excludes any invention characterized as an “abstract idea.” This resulted in many issued patents being invalidated, and increased rejections of patent applications at the USPTO.
The Court’s newly declared two-step abstract idea test determines (1) if patent claims are “directed to” an abstract idea and, if so, (2) whether the claims recite “significantly more” than the abstract idea itself. Unfortunately, the Court provided only the test, leaving what constitutes an “abstract idea” and when claims recite “significantly more” for another day.
Thus, the duty has fallen to the lower courts to define the test and to the USPTO to figure out implementation in applications. Both have struggled. Since the Alice Corp. decision, only a handful of Federal Circuit cases have determined that a patent claims patent eligible subject matter. The contradicting legal opinions and varying standards for identifying eligible subject matter by the USPTO have left attorneys and corporations alike adrift and trying to determine what is left to patent. In certain technical groups within the USPTO (e.g., business method art units), most relating to software, the patent allowance rates have plummeted, causing many applicants to abandon their ideas or otherwise incur increased costs of prosecuting their patent applications.
Hope for New Applications
At least one case in late 2014 provided direction for obtaining meaningful patent protection. Although the DDR Holdings case was not the widespread panacea that patentees and applicants were looking for, it did indicate that technical ideas are not necessarily abstract, and therefore can be patented. More recent cases in 2016, including Enfish, TLI, and Bascom, as well as follow-up guidance from the USPTO, helped further define the tests used for determining what can and cannot be patented.
In the current landscape, the USPTO has taken a conservative approach by placing a majority of the burden on the patent applicant to prove that a patent application does not claim an abstract idea. By placing the burden on the applicant to show eligibility, patenting software has become a more difficult and expensive process. However, the process is not impossible, even within the most difficult art units, if certain strategies are used.
Recent cases and interactions with the USPTO have taught that technically-based inventions, such as inventions that target improving the functioning of a computer itself, are still eligible subject matter. Success in obtaining and defending patent claims is directly related to what ideas the claims are directed to and how they are characterized in the patent application and during prosecution. Also, the procedural manner by which you prosecute inventions can play a large part in whether or not you are granted a patent.
To obtain a patent under the current guidelines, care must be taken in defining and claiming the invention. Technical features that solve technical problems, such as those described within the Enfish case, should be carefully defined and described. Most software can be described as a collection of technical features, with some being more important (and technical) than others. A successful strategy includes capturing the invention by covering a collection of technical aspects, each of which may provide incremental value. The days of describing an invention broadly, sometimes without much technical detail, are over.
Well-written applications should include more technical detail and examples of improvement over conventional computer functions. Each of the latest cases finding eligible subject matter—including DDR, Enfish, and Bascom—can be used to build a path to an allowable application.
For instance, careful planning is needed to identify technical features that can be analogized to DDR where the invention is necessarily rooted in computer technology—that is, the invention necessitates computers. Claims should also be focused on technical implementations to increase the chances of ending the abstract idea inquiry at step one, as discussed in the Enfish decision. That is, if the technical implementation claimed is not “directed to” an abstract idea, the claim is eligible. Also, even if the elements of the claim are known but are arranged in a novel way, examples should be included to describe improved operation of a computer and meet the second step of the inquiry, as discussed in the Bascom case.
Technical areas that can still be protected in software are numerous if cast in a technical light. For instance, system-level aspects, architecture, protocols, and other technically-based features are still fair game for patenting. Although there appear to be many ways to write better patents that hold up to the new standards, another significant challenge is how to successfully prosecute existing applications written under a different standard.
Saving Existing Cases
Many challenges exist when prosecuting existing cases with the USPTO, as they may be stalled, rejected or otherwise abandoned after a lack of successful outcome. For some companies, this has resulted in lost investment, increased patent costs, and frustration for those relying on obtaining such protection. Depending on the nature of the invention, closeness to the prior art, and other factors, a custom prosecution approach may improve the chances of success.
For an existing case, one approach is to change the claims to cover a technical feature described somewhere within the patent specification. The technical feature need not be the best feature of the application, but it should be one that would allow you to push the case to allowance. Because one valid strategy is to delay prosecution until more favorable (and well-defined) guidelines exist for these types of cases, it makes sense to obtain what narrow protection is available currently, and pursue additional and perhaps broader coverage later in a continuation application.
Another approach that should be used in conjunction with technical elements involves actively interviewing cases with the assigned patent examiner. Such interviews should include the patent examiner’s supervisor to accelerate agreement on the issues. Interviews have always been a valid approach for advancing prosecution; especially when it comes to software cases having abstract idea rejections, it is useful to understand the examiner’s position so that an expedited result can be reached.
Yet another approach involves appealing cases. This approach can be beneficial for the delay introduced in prosecution, which can be several years due to the current number of backlogged cases. Many borderline cases where there is a question of law or close facts may benefit from this strategy. In some cases, appeal is warranted because the facts are too close, the examiner cannot agree on eligible subject matter, or a supervisor has maintained the subject matter rejection (sometimes contrary to the working examiner). In these cases, the faster you can identify the need for appeal, the better you can reduce the legal costs that are incurred.
Statistical data may also be used to determine the appropriate procedural path through the USPTO, including the need for appeal. Commercial tools are available for reviewing the tendencies of particular examiners and art groups, and locating successful cases and arguments that could win the day. Also, because there are widely different allowance rates between art units and examiners (even within the same group), it is beneficial to forum shop to the client’s advantage. For example, the use of common specifications with different targeted claim sets may permit a case to be assigned to a particular art unit, which may dramatically increase the likelihood of getting a patent.
By using some of these approaches, we have successfully navigated the abstract idea landscape. In one case where an inventor wanted to leverage her patent granting to secure funding, aggressive interviewing, increased technicality of the claims, and responses were used to obtain a patent in a business method unit of the USPTO (typically having allowance rates in the single digits). Moreover, this patent (US Patent No. 9,384,505) was secured using an accelerated patent filing process which typically concludes in a year, and provided the inventor the outcome she had wanted.
In another example, a patent application covering financial processing systems was languishing in the business method unit of the USPTO. Under current classification approaches there, mentioning financially-related processing can result in assignment to the business method art unit. Tying the claims directly to the hardware and circuit architecture allowed the applicant to overcome the subject matter rejection in an art unit having a very low allowance rate (US Pub. No. 2013-0226764).
The bottom line is that although software patents have been under fire for the past several years, there are valid approaches to successfully preparing and prosecuting software patents in the current environment. By using lessons learned from recent cases and taking a more active role in prosecution, clients can obtain the protection that they need.