Remember When You Couldn't Patent Math? Good Times

from the patenting-counting... dept

Thu, Dec 6th 2012 7:38am — Mike Masnick

Ah, it really was just recently that we were talking about the seminal Supreme Court case, Gottschalk v. Benson, in which the Justices made it clear that you cannot just patent an algorithm that converts numbers:

It is conceded that one may not patent an idea. But in practical effect that would be the result if the formula for converting BCD numerals to pure binary numerals were patented in this case. The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.

I'm reminded of that, after seeing Dealbreaker's headline about how world famous mutual fund investor, Bill Gross, of PIMCO, has patented the methodology for his bond fund -- or, as Dealbreaker correctly points out, he "patented a way to count." Indeed, the patent in question, US Patent 8,306,892 is somewhat hideous, describing not much more than the concept of an algorithm that weights regions based on GDP. The key claim:

A computer-implemented method of managing a fixed income financial index, the method comprising: storing in a computer memory a regional weight for each of a plurality of regions of the world, each of the regional weights based at least in part on a gross domestic product for the region; storing in a computer memory, for each of the plurality of regions, a category weight for each of a plurality of categories of fixed income financial instruments issued from the region; storing in a computer memory asset data for a universe of fixed income instruments representing each of the plurality of categories of instruments in each of the plurality of regions, the fixed income instruments comprising one or more of the following: (i) fixed income securities, (ii) fixed income derivatives, or (iii) fixed income forwards; programmatically allocating, via execution of instructions by one or more computer processors, one or more constituent instruments from the universe of fixed income instruments to each of the plurality of categories in each of the plurality of regions; programmatically determining a constituent weight for each of the constituents allocated to each of the plurality of categories in each of the plurality of regions; programmatically calculating a subindex for each of the plurality of categories in each of the plurality of regions, each subindex based at least in part on the allocated constituents and the respective constituent weights, wherein the constituent weights for a first subindex comprise market capitalization weights and the constituent weights for a second subindex comprise gross-domestic product weights; and programmatically transforming the subindices, the category weights, and the regional weights into a value for the financial index.

It doesn't take a patent specialist to figure out that this is basically patenting a spreadsheet for weighting countries on a few different factors. It seems to be the exact kind of thing that was disallowed by the Supreme Court under Gottschalk v. Benson. And yet, the USPTO waved it right on through. Kinda makes you wonder what the hell patent examiner Samica L. Norman was thinking in approving such a ridiculous patent.

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Filed Under: bill gross, index fund, math, patents
Companies: pimco

45 Comments

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Reader Comments

The First Word

“

Finally!

A reason to be bad at math!

"Why are you failing at math?"
"Because I'd get sued otherwise!"

—silverscarcat

”

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silverscarcat (profile), 6 Dec 2012 @ 7:44am

Finally!
A reason to be bad at math!

"Why are you failing at math?"
"Because I'd get sued otherwise!"
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- Michael, 6 Dec 2012 @ 9:23am
  
  Re: Finally!
  The lottery is proof that most people don't need a reason to be bad at math.
  [ link to this | view in chronology ]
Anonymous Coward, 6 Dec 2012 @ 7:46am

'makes you wonder what the hell patent examiner Samica L. Norman was thinking in approving such a ridiculous patent.'

at a rough guess, counting the amount of money that had just been 'patented' into the pocket!
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- Anonymous Coward, 6 Dec 2012 @ 8:10am
  
  Re:
  I will defend Samica L Norman to the point of probably not taking a bribe to approve this.
  
  The system itself is most likely to blame for the passage. The examiners have a quota of patents to process. It is much easier and faster to approve a patent than it is to reject it. Until a patent is approved the examiner is likely to get a barrage of phone calls or emails from the applicant's attorney. Every objection raised by the examiner is likely to be met with a another amendment to the application, and it will take more time to examine it. I imagine that eventually the examiner goes with the Star Wars philosophy to "Let the Wookie win."
  
  I am slow to blame the examiners when they work in a totally broken system. Virtually the only pushback examiners receive is when the decision is so terrible that it becomes the subject of news items and blogs like TD.
  [ link to this | view in chronology ]
  - ChurchHatesTucker (profile), 6 Dec 2012 @ 8:21am
    
    Re: Re:
    Then it's our job to shame them.
    [ link to this | view in chronology ]
  - That One Guy (profile), 6 Dec 2012 @ 8:25am
    
    Re: Re:
    I'm sorry but, 'Because it's hard' is not a valid excuse to suck at your job.
    
    If they have a quota or something they have to fulfill, a set number of patents they have to go over per month or be fired, then yeah, that needs to go. Quotas are almost always a bad idea, putting the quantity of what you do ahead of the quality.
    
    However, when your entire job is going over patent applications to make sure what's being described is even patentable, and you let crap like this get the okay because it would be hard and involve actual work to say 'No' and send it back... in that case someone needs to lose their job.
    
    These crap decisions have real world consequences, so just rubberstamping any application that gets put under their noses is very much not acceptable.
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    - Sneeje (profile), 6 Dec 2012 @ 8:46am
      
      Re: Re: Re:
      I think what the AC above was trying to say was not "the job is hard", but that examiners have virtually no systemic support for rejecting patents.
      
      Meaning nothing in their ecosystem of regulations, process, or leadership give them the tools by which they can reject a patent and have the system help them defend that result.
      
      If you work in an environment where you are accountable to make formal judgments of A or B, and NO ONE supports you or has your back when you choose B, AND everyone wants you to make the judgment in the shortest time possible, eventually you just learn to just pick A.
      [ link to this | view in chronology ]
      - That One Guy (profile), 6 Dec 2012 @ 9:21am
        
        Re: Re: Re: Re:
        If that's the case then I suppose the examiners, for the most part, would be off the hook, as that would most certainly fall under 'doing the best you can in an impossible situation'.
        
        In that case though it would seem the list of 'people who need to be fired' would just be shifted up, so you could start replacing the morons who set up that insane situation with people who actually know that they're doing.
        [ link to this | view in chronology ]
        
        Sneeje (profile), 6 Dec 2012 @ 12:22pm
        
        Re: Re: Re: Re: Re:
        I'm certainly don't have any first-hand information, I've just experienced similar environments in my work with the federal government for the last thirty years.
        
        I wholeheartedly agree with what you said before, that "the job is hard" isn't an excuse--it's just in this case, everything I've read seems to support the idea that the industry gets its way almost always as long as it is simply persistent. That indicates a systemic failure, not just one of individual competence.
        [ link to this | view in chronology ]
  - Anonymous Coward, 6 Dec 2012 @ 8:27am
    
    Re: Re:
    Also if they reject it, they could face a legal challenge and have to fund their defense in a law suite. If they approve it the company they issued it to and however wants to challenge the patent pay the legal bills. Further they get the patent fees while the patent is in force.
    [ link to this | view in chronology ]
Anonymous Coward, 6 Dec 2012 @ 7:51am

Not Infallible
in which the Justices made it clear that you cannot just patent an algorithm that converts numbers

Well, the Justices were just fucking W R O N G.

They're only a court. Not the Supreme Gods. They're not infallible. They can be wrong. And this patent proves it.

No matter what the Justices say, you can too patent an algorithm that converts numbers. This patent is the counter-example that disproves the assertion. It is the living proof of the contrary assertion.

You can't argue with proof. � L I V I N G �� P R O O F.
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- Josef Anvil (profile), 6 Dec 2012 @ 8:08am
  
  Re: Not Infallible
  Glad you finally came around to the right side. You are right the justices are not infallible and they can be wrong.
  
  Guess what? The community here has been asserting for some time that reality or "L I V I N G P R O O F" should not be argued. Yet time and again we hear that patents and copyright and other intellectual privilege is NEEDED in the digital age. Well the LIVING PROOF says otherwise.
  
  Again, glad you came to your senses.
  [ link to this | view in chronology ]
- PaulT (profile), 6 Dec 2012 @ 8:12am
  
  Re: Not Infallible
  It's interesting that your take from this is that the justices must be wrong about the law, rather than that the patent office made a mistake in granting this patent. It's always nice when someone displays their preconceived biases so clearly.
  [ link to this | view in chronology ]
  - drewdad (profile), 6 Dec 2012 @ 8:28am
    
    Re: Re: Not Infallible
    I think you missed the sarcasm.
    
    Supreme Court: You can't patent math.
    
    Patent office: Patent granted for math.
    
    Conclusion: Supreme Court is wrong.
    
    By the rules of logic, it is a valid conclusion, but it is nevertheless absurd in the real world, which is what it was supposed to point out.
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- Anonymous Coward, 6 Dec 2012 @ 8:19am
  
  Re: Not Infallible
  Poe's law?
  [ link to this | view in chronology ]
- ldne, 6 Dec 2012 @ 3:07pm
  
  Re: Not Infallible
  I hope this stupidity is sarcasm. The Supreme Court over rules the patent office, and Congress, and always has. they're the highest court in the land after all.
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Baldaur Regis (profile), 6 Dec 2012 @ 7:53am

Normal Person: "A computer-implemented method blah blah blah..." WTF is this shit?

Patent Examiner: "A computer-implemented method." Patent granted!
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- Anonymous Coward, 6 Dec 2012 @ 3:56pm
  
  Re:
  Probably more like
  
  Patent Examiner: "A computer-implemented method blah blah blah...". I haven't got time to read this shit. Patent granted!
  [ link to this | view in chronology ]
bshock, 6 Dec 2012 @ 8:05am

Only one question in government
Over the past 50 years or so I've looked at various individuals in the U.S. government and asked, "Is he criminally incompetent, or just criminal?"

More often than not, the answer to this question has been "yes to both."
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Josef Anvil (profile), 6 Dec 2012 @ 8:10am

What was he thinking????
The examiner was thinking that there are just too many words in this bullshit patent and he had better just move on because there were soooo many more to approve that day or he might lose his job.
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out_of_the_blue, 6 Dec 2012 @ 8:14am

Mike's spin: don't blame "world famous mutual fund investor, Bill Gross, of PIMCO",
but the patent examiner! Somehow MIke always makes it look like fault lies with people at the bottom while never a hint from him to blame upwards! -- Who knows what pressure the patent examiner was under? Rich people are able to invisbily inflence the system. -- And at worst, Gross has to watch for and prosecute this in court: it's no skin off our nose if he does. The gov't is likely ahead by whatever the patent fee was, so it's a win for the system.

[Don't think I forgot the link for "Streisand Effect": I omit when wish focus elsewhere.]
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- Michael, 6 Dec 2012 @ 8:23am
  
  Re: Mike's spin: don't blame "world famous mutual fund investor, Bill Gross, of PIMCO",
  "The gov't is likely ahead by whatever the patent fee was, so it's a win for the system"
  
  Never mind the poor guy that decides to, you know, use MATH and has to defend this crazy decision in court.
  
  Yup - a real win there.
  [ link to this | view in chronology ]
- PaulT (profile), 6 Dec 2012 @ 8:24am
  
  Re: Mike's spin: don't blame "world famous mutual fund investor, Bill Gross, of PIMCO",
  "[Don't think I forgot the link for "Streisand Effect": I omit when wish focus elsewhere.]"
  
  You still haven't explained what possible relevance that link has to anything to begin with, or what it is you're trying to achieve by advertising well-known public facts about a regularly used term. Perhaps you'd like to furnish us with an explanation the sane among us can understand?
  [ link to this | view in chronology ]
  - Matthew Cline (profile), 6 Dec 2012 @ 11:53am
    
    Re: Re: Mike's spin: don't blame "world famous mutual fund investor, Bill Gross, of PIMCO",
    You still haven't explained what possible relevance that link has to anything to begin with, or what it is you're trying to achieve by advertising well-known public facts about a regularly used term.
    So far as I can tell, his intent is claiming:
    
    A) Mike regularly brags about having coined the phrase "Streisand Effect".
    
    B) His life is so incredibly pathetic that all of his other life achievements pale in comparison to having coined the term "Streisand Effect".
    
    C) Both of the above.
    [ link to this | view in chronology ]
    - PaulT (profile), 7 Dec 2012 @ 1:29am
      
      Re: Re: Re: Mike's spin: don't blame "world famous mutual fund investor, Bill Gross, of PIMCO",
      "A) Mike regularly brags about having coined the phrase "Streisand Effect"."
      
      Does he? I don't think I've ever read him mention it here outside of articles where it's directly relevant, and I'm not even sure he mentions that he coined the term except when noting that other people are using it. Maybe I'm wrong. Even then, I'm not sure how obsessively linking to an article that factually states that he did in fact coin the term achieves anything.
      
      "B) His life is so incredibly pathetic that all of his other life achievements pale in comparison to having coined the term "Streisand Effect"."
      
      If that's his point, what does that say about the person whose only achievement seems to be obsessively attacking him, I wonder?
      [ link to this | view in chronology ]
- Cory of PC (profile), 6 Dec 2012 @ 8:33am
  
  Re:
  ... Again, this is why no one likes you, Blue. You come in, say your crazy comment, people come in, argue that you're crazy, and flag down your comment.
  
  Perhaps you need to take a break away from the computer. You really need to get a life, girl/boyfriend, job, car, house, pet, food, water, surgery, medicine, clothes, logic, sanity, decency, common sense, am I missing something?
  
  And please do leave that link out; it serves no purpose, you troll!
  [ link to this | view in chronology ]
  - dennis deems, 6 Dec 2012 @ 10:00am
    
    Re: Re:
    am I missing something?
    
    Only that these are all things which it is terribly difficult for a schizophrenic to get and hold onto. Sad, but true.
    [ link to this | view in chronology ]
- Anonymous Coward, 6 Dec 2012 @ 11:55am
  
  Re: Mike's spin: don't blame "world famous mutual fund investor, Bill Gross, of PIMCO",
  Oh come on! Gross has money to burn, so the cost of obtaining this patent was tiny, compared to the billions he can rake in when it's time to enforce it. Don't hate the player, hate the game.
  [ link to this | view in chronology ]
jameshogg (profile), 6 Dec 2012 @ 8:19am

And to think, now you cannot even add up your court costs and infringement fines without being sued again.

IP maximalists are just groveling apologists.
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Michael, 6 Dec 2012 @ 8:19am

I just submitted my new patent application
A computer-implemented method of managing a fixed income financial index, the method comprising: storing in a computer memory a regional weight for each of a plurality of regions of the world, each of the regional weights based at least in part on a gross domestic product for the region; storing in a computer memory, for each of the plurality of regions, a category weight for each of a plurality of categories of fixed income financial instruments issued from the region; storing in a computer memory asset data for a universe of fixed income instruments representing each of the plurality of categories of instruments in each of the plurality of regions, the fixed income instruments comprising one or more of the following: (i) fixed income securities, (ii) fixed income derivatives, or (iii) fixed income forwards; programmatically allocating, via execution of instructions by one or more computer processors, one or more constituent instruments from the universe of fixed income instruments to each of the plurality of categories in each of the plurality of regions; programmatically determining a constituent weight for each of the constituents allocated to each of the plurality of categories in each of the plurality of regions; programmatically calculating a subindex for each of the plurality of categories in each of the plurality of regions, each subindex based at least in part on the allocated constituents and the respective constituent weights, wherein the constituent weights for a first subindex comprise market capitalization weights and the constituent weights for a second subindex comprise gross-domestic product weights; and programmatically transforming the subindices, the category weights, and the regional weights into a value for the financial index - on the internet.
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- That One Guy (profile), 6 Dec 2012 @ 8:28am
  
  Re: I just submitted my new patent application
  I know that was sarcasm, but it would be hilarious had you actually done that. I can almost guarantee it would be approved, since you used the magic words 'on the internet'.
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  - Anonymous Coward, 6 Dec 2012 @ 10:04am
    
    Re: Re: I just submitted my new patent application
    I think you'd have to change on the internet to lawyerspeak first. Something like "Group of networked computer terminals"
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gorehound (profile), 6 Dec 2012 @ 8:22am

More tales of greed and Corruption and in our Government.
Every day we hear another tale of greedy A-holes and their krap Patents.
We need change but there are just to many sheeple and they the sheeple do not realize how much they are being ripped off.
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- Michael, 6 Dec 2012 @ 8:48am
  
  Re:
  "More tales of greed and Corruption and in our Government"
  
  I don't think that is very fair. We have no real evidence of either greed or corruption here - just stupidity and laziness.
  [ link to this | view in chronology ]
Anonymous Coward, 6 Dec 2012 @ 8:27am

USPTO copies as linked here are notoriously bad because they do not present the actual document as issued. This is in part due to the fact that 3rd party software must be used to accomplish the task. A far better location is Freepatentsonline.com, which provides the opportunity to download the patent as published in PDF format.

As for the insinuation that the examiner did little more than rubberstap the application, it might be useful to study the guidance provided to all examiners concerning subject matter that at first glance could involve one of the three judicially defined exceptions to patent eligibility, namely, laws of nature, physical phenomena, and abstract ideas.
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- Anonymous Coward, 6 Dec 2012 @ 11:28am
  
  Re:
  I neglected to link to the guidance provided USPTO examiners.
  
  It can be found at:
  
  http://www.uspto.gov/web/offices/pac/mpep/s2106.html
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  - John Fenderson (profile), 6 Dec 2012 @ 11:58am
    
    Re: Re:
    OK, read it, now... what was the point you were wanting to make about it?
    [ link to this | view in chronology ]
Mega1987 (profile), 6 Dec 2012 @ 11:43am

O_O

Patenting math?

Looks like those who got major in Engineering and Sciences who suck on mathematics are jumping in joy....

whoever sprung that idea really hate his Mathematics professor for making his school life hell...
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David Muir (profile), 6 Dec 2012 @ 11:52am

Real Patent Examiner?
Samica L. Norman is an anagram of Maniacal Norms.

This kind of craziness is becoming all too normal at the patent office.
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Anonymous Coward, 6 Dec 2012 @ 2:16pm

Written on the blackboard
GOTTS CHALK?
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proffer, 6 Dec 2012 @ 2:29pm

Samica L. Norman
Samica L. Norman seems to have been hired just to grant patents related to numerical processing. Check out all the patents approved by him (or her?):

http://patents.justia.com/examiner/SAMICALNORMAN.html
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Anonymous Coward, 6 Dec 2012 @ 5:48pm

So - The Onion article from years gone by might actually have been predicting the future

Microsoft Patents Ones, Zeroes
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Gene Cavanaugh (profile), 7 Dec 2012 @ 10:56am

What was the patent examiner thinking?
As an IP attorney, I can tell you. the examiner was thinking that by meeting the "performance vs. revenue" goals of the USPTO, which generally mean disallowing inventions while allowing anything that is easy and makes a lot of money, the Director will be pleased.
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btrussell (profile), 8 Dec 2012 @ 1:18am

"Kinda makes you wonder what the hell patent examiner Samica L. Norman was thinking in approving such a ridiculous patent."

Thinking? Not thinking is a job requirement.
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Anonymous Coward, 28 Oct 2014 @ 1:25pm

Patents
Patents may be granted but not defensible.
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