October 2014

PTAB Holds Software Claims Indefinite

With all the attention paid recently to patent-eligibility questions under 35 U.S.C. § 101, patent drafters should take note of a recent decision by the USPTO’s Patent Trial and Appeal Board (PTAB) holding claims indefinite under 35 U.S.C. § 112, second paragraph.  In In re Dawson, Appeal 2012-004396 (Sept. 18, 2014), the PTAB entered a new ground of rejection under Section 112, and consequently reversed rejections under 35 U.S.C. § 102(e) on grounds that the invention could not have been well enough understood for a prior art rejection to have been made. The patent applicant had appealed the Examiner’s rejection of the following claim: 1. A method, performed on a computer system, for ameliorating an offer of transport that a first avatar online in a virtual universe is targeted to receive from a second avatar online in the virtual universe for teleporting to another virtual region within the virtual universe for exposure to an advertisement, the method comprising: using the computer system to perform the following: detecting that the second avatar has sent the first avatar the offer of transport to the virtual region for exposure to the advertisement via a virtual universe client that provides interaction with the virtual… Read More »PTAB Holds Software Claims Indefinite

Patent Claims For Retrieval of Data from Medical Database Held Not Patent-Eligible

Patent claims directed to a medical database did not meet patent-eligibility requirements of 35 U.S.C. § 101. Therefore, the court in Cogent Med., Inc. v. Elsevier Inc., Nos. C-13-4479-RMW; C-13-4483-RMW; C-13-4486-RMW (N.D. Cal. Sept. 30, 2014), granted a motion to dismiss the plaintiffs complaint for patent infringement for failing to state a claim under FRCP 12(b)(6). The court quoted from the Detailed Description of the patent-in-suit, U.S. Patent No. 7,133,879, for a summary of the “alleged invention:” The invention provides access to one or more databases to a user. The user can select areas of interest and store searches to be performed on the databases. Additionally, the user can access data selections made by an entity other than the user. For example, the user can request data selections regarding a specified topic made by an expert in that topic. The user can request data selections made by an advertiser. Further, claim 1 was “representative of the other claims,” and recited “a method for providing data to a user from one or more data sets.” Before considering the patent-eligibility of the claims, the court considered the patent owner’s argument that claim construction was necessary before the question of patentable subject matter… Read More »Patent Claims For Retrieval of Data from Medical Database Held Not Patent-Eligible

Court Finds Patent Claims Directed to Abstract Idea But Denies Motion to Dismiss

Patent claims directed “to the abstract idea of verifying a transaction” included “a limitation requiring pseudorandom tag generating software that could not be done with pen and paper,” which limitation could plausibly be read as narrowing the claims to make them patent-eligible. Therefore, the court in Card Verification Solutions, LLC v. Citigroup Inc., No. 13 C 6339 (N.D. Ill. Sept. 29, 2014), denied the defendant’s motion to dismiss for lack of patent-eligible subject matter under 35 U.S.C. § 101. Claims of United States Patent No. 5,826,245 recite methods such as “giving verification information for a transaction between an initiating party and a verification-seeking party, the verification information being given by a third, verifying party, based on confidential information in the possession of the initiating party.” The court did not hesitate to say that “the claims are drawn to the concept of verifying transaction information,” which was a fundamental economic practice, and therefore an “abstract idea.” Nonetheless, “[a] plausible interpretation of the patent is that computing devices, software, keyboards, and credit card readers would be required to use the invention.” While mere implementation in a computer did not make an abstract idea patent-eligible, in this case “an entirely plausible interpretation of… Read More »Court Finds Patent Claims Directed to Abstract Idea But Denies Motion to Dismiss

Online Terms and Conditions Are Usually Enforceable

Many commercial transactions are governed by online terms and conditions provided by one party, to which another party may be bound even if provided only with a reference or link to the online terms and conditions. This truth is illustrated by the recent case of Tuscany S. Am. v. Pentagon Freight Sys., No. 4:12-CV-1309 (S.D. Tex. Sept. 24, 2014). In fact, an affirmative assent to or acceptance of terms and conditions is not even required. Tuscany, the plaintiff, had contracted with Pentagon, the defendant, “to provide freight forwarding services for . . . cargo, including customs clearance in Brazil.” After the cargo was seized in Brazil, and some sold at auction (the rest was released), Tuscany sued for damages. Pentagon argued that its damages were limited by a provision in “the Terms and Conditions of Service promulgated by the National Customs Brokers and Forwarders Association of America, Inc. [NCBFAA],” which the court referred to simply as “the Terms.” Pentagon had sent Tuscany an email confirming the parties’ oral agreement. That email included “[a] sentence referring to the Terms . . . the signature block.” Further, numerous agreements before the agreement, and after the agreement but before the cargo was shipped,… Read More »Online Terms and Conditions Are Usually Enforceable

Patent Claims Drawn to Internet Monitoring and Network Control Are Patent-Eligible, Delaware Court Holds

Patent claims directed to remote monitoring of network sessions and management of computer network access are patent-eligible under 35 U.S.C. § 101, according to a recent Delaware decision. Helios Software v. Spectorsoft Corp., No. 12-081-LPS (Sept. 18, 2014). The court’s decision came in the midst of decisions on a volley of summary judgment motions that the parties had brought; in this instance, the court was deciding the plaintiff’s motion for summary judgment concerning the defendant’s affirmative defense alleging lack of patentable subject matter under Section 101. Of the three patents-in-suit, two, U.S. Patent Nos. 6,978,304 and 7,634,571, were entitled “Method of Remotely Monitoring an Internet Session,” and the third, U.S. Patent No. 7,958,237, was entitled “Method for Managing Computer Network Access.” The defendant had argued that “remotely monitoring data associated with an Internet session” and “controlling computer network access” were basic and routine generic computer functions that failed to qualify for patent protection as abstract ideas. The defendant provided no evidence that monitoring an Internet session or controlling computer network access were fundamental truths or principles that, if patented, “would pre-empt the use of basic tools of scientific and technological work.” Although these concepts could “be principles fundamental to the… Read More »Patent Claims Drawn to Internet Monitoring and Network Control Are Patent-Eligible, Delaware Court Holds

Initiation of CBM Review on Section 101 Grounds Justifies Stay of Patent Case

The Federal Circuit has affirmed the decision of Judge Stark in the District of Delaware to stay a lawsuit alleging infringement of U.S. Patent No. 6,625,582 following the U.S. Patent and Trademark Office’s decision to institute a Covered Business Method (CBM) review of the ’582 patent. Benefit Funding Systems, LLC v. Advance America Cash Advance Centers, Inc., Nos. 2014-1122, -1124, -1125 (Fed. Cir. Sept. 25, 2014). The district court had found that all statutory factors weighed in favor of a stay. On appeal, the patent owner argued that the PTAB did not have authority to consider, in a CBM, the question of patent-eligibility under 35 U.S.C. § 101. The Federal Circuit, in an opinion by Chief Judge Prost for a unanimous panel, while telegraphing disagreement, found that it did not need to reach this question to affirm the district court’s decision. Procedural Background One of the defendants, U.S. Bancorp, had filed a petition for a CBM Review with the USPTO’s Patent Trial and Appeal Board (PTAB) under the America Invents Act, Pub. L. No. 112-29, § 18, 125 Stat. 284, 329–31 (2011) (“AIA”), ten months after the plaintiff initiated litigation. The district court denied U.S. Bancorp’s initial motion for a stay,… Read More »Initiation of CBM Review on Section 101 Grounds Justifies Stay of Patent Case