Bingo!... Is Not Patentable Just Because You Put It On The Internet

from the b-i-n-no-go dept

Another day, another story of stupid software patents getting stomped out of existence thanks to the Supreme Court's Alice v. CLS Bank ruling. As we've been noting, this ruling is looking like it's going to invalidate a ton of software patents (and that's a good thing). The latest one dumped was an attempt to patent bingo online. Yes, bingo. The lower court had already rejected the patent using previous Supreme Court rulings against patenting "abstract ideas." Now, with the Alice ruling in hand, the Appeals Court for the Federal Circuit (CAFC) completed the stomping out of the bingo patent. They didn't waste much time on it either, pushing out a compact 7-page ruling. It makes short work of Planet Bingo (yes, that's the patent holder's name) and its claim that the patent actually is inventive and new:

“[I]f a patent’s recitation of a computer amounts to a mere instruction to ‘implemen[t]’ an abstract idea ‘on . . . a computer,’ . . . that addition cannot impart patent eligibility.” Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S. Ct. at 1301). In this case, the claims recite a generic computer implementation of the covered abstract idea.

Planet Bingo argues that the patents recite "significantly more" than an abstract idea because the invention includes “complex computer code with three distinct subparts.” ... We disagree. The ’646 and ’045 patents do not claim the “accounting program,” “ticket program,” and “verification program” that Planet Bingo identifies in its briefs. Instead, the claims recite a program that is used for the generic functions of storing, retrieving, and verifying a chosen set of bingo numbers against a winning set of bingo numbers. And, as was the case in Alice, “the function performed by the computer at each step of the process is ‘[p]urely conventional.’”

Planet Bingo really pushed hard on the ridiculous idea that because lots of numbers were involved, this was patentable subject matter. CAFC didn't buy it.

Planet Bingo argues that “in real world use, literally thousands, if not millions of preselected Bingo numbers are handled by the claimed computer program,” making it impossible for the invention to be carried out manually.... But the claimed inventions not require as much. At most, the claims require “two sets of Bingo numbers,” “a player,” and “a manager.” ... We need not, and do not, address whether a claimed invention requiring many transactions might tip the scales of patent eligibility, as the claims fall far short of capturing an invention that necessarily handles "thousands, if not millions” of bingo numbers or players.

It's a new era for software patents, and it looks like many of them are invalid. It's also a new era for CAFC, which both has new leadership... and (finally) some pretty clear instructions from the Supreme Court to dump these broadly written software patents. It may take a few years for the system to clear out, but this is going to be tremendously helpful for companies that actually innovate, rather than those that just try to shove tollbooths in the innovative process.

Filed Under: bingo, cafc, patentable subject matter, patents
Companies: alice, cls bank, planet bingo

Ridiculous Patent Troll Gets Stomped By CAFC, Just Months After Being Awarded A Huge Chunk Of Google's Ad Revenue

from the couldn't-have-happened-to-a-nicer-bunch dept

We've written a few times about Vringo, a patent troll (which got its name, and public stock status, from a reverse merger with a basically defunct public "video ringtone" company and a pure patent troll called I/P Engine). The company was using some very broad patents (6,314,420 and 6,775,664) to claim that Google and Microsoft were infringing based on how their search ad programs worked. In effect, Vringo, whose patents were at one time associated with Lycos, was trying to pull off another Overture move -- patenting a basic idea for search ads, and then cashing in from Google actually making it work. The case took a slight detour into the bizarre when Microsoft not only settled with Vringo for $1 million -- but also with a promise to pay 5% of whatever Google had to pay.

While the original ruling against Google in 2012 had the jury reject Vringo's request for nearly $700 million, and giving it "just" $30 million, in February of this year, a judge magically decided that 1.36% of all of Google's AdWords revenue (which is most of its revenue) belonged to Vringo.

Between February and now, however, something wonderful happened. That something wonderful was the Supreme Court's ruling in CLS Bank v. Alice. As we noted at the time, depending on how you read it, it certainly could be interpreted that nearly all software patents were invalid -- even as the ruling itself insisted that wasn't the case. Still, the early returns are promising, with CAFC (apparently finally getting the message) starting to smack down software patents.

So with the Vringo patents before CAFC, it appears they got the Alice treatment, with CAFC tossing them out as totally invalid for patenting a basic concept. The ruling focuses on how the ideas were obvious to those skilled in the art based on (a rather large amount of) prior art:

As the asserted patents themselves acknowledge, however, search engines, content-based filtering, and collaborative filtering were all well-known in the art at the time of the claimed invention.... The record is replete, moreover, with prior art references recognizing that content-based and collaborative filtering are complimentary techniques that can be effectively combined. The WebHound reference explains that “content-based and automated collaborative filtering are complementary techniques, and the combination of [automated collaborative filtering] with some easily extractable features of documents is a powerful information filtering technique for complex information spaces." ... The Fab reference likewise notes that “[o]nline readers are in need of tools to help them cope with the mass of content available on the World-Wide Web,” and explains that “[b]y combining both collaborative and content-based filtering systems,” many of the weaknesses in each approach can be eliminated.... Similarly, the Rose patent, which was filed in 1994 by engineers at Apple Computer, Inc., states that “[t]he prediction of relevance [to a user’s interests] is carried out by combining data pertaining to the content of each item of information with other data regarding correlations of interest between users."

The ruling laughs off Vringo's claims that its patents took things a step further by combining two ideas, pointing out that this was quite obvious at the time.

But the concurring opinion by Judge Mayer calls out the Alice ruling and the fact that this stuff isn't patentable in the first place:

Because the claims asserted by I/P Engine, Inc. (“I/P Engine”) disclose no new technology, but instead simply recite the use of a generic computer to implement a well-known and widely-practiced technique for organizing information, they fall outside the ambit of 35 U.S.C. § 101...

[....]

I/P Engine’s claimed system is merely an Internet iteration of the basic concept of combining content and collaborative data, relying for implementation on “a generic computer to perform generic computer functions.” ...

Moreover, the scope of the claimed invention is staggering, potentially covering a significant portion of all online advertising. I/P Engine’s asserted claims fall outside section 101 because their broad and sweeping reach is vastly disproportionate to their minimal technological disclosure.

That last line is a fun one.

Either way, it looks like the writing may be on the wall for software patent trolls. Vringo's stock collapsed after the ruling and some other public patent trolls also saw their stock drop. Couldn't happen to a more deserving group of leeches on innovation.

Filed Under: cafc, patent troll, search ads
Companies: alice, cls bank, google, ip engine, microsoft, vringo

Latest CAFC Ruling Suggests A Whole Lot Of Software Patents Are Likely Invalid

from the target-practice dept

Some more good news on the patent front. Following the Supreme Court's ruling last month in the Alice v. CLS Bank case, there has been some question about how the lower courts would now look at software patents. As we noted, the Supreme Court's ruling would seem to technically invalidate nearly all software patents by basically saying that if a patent "does no more than require a generic computer to perform generic computer functions" then it's no longer patentable. But that, of course, is basically all that software does. Still, the Supreme Court's ruling also insisted that plenty of software was still patentable, but it didn't give any actual examples.

Now in the first post-Alice ruling on a software patent at CAFC (the appeals court that handles all patent cases, and which is infamous for massively expanding the patentability of software over the years), the court has smacked down a patent held by one of the many (many, many) shell companies of patent trolling giant Acacia. The shell, Digitech Image Technologies, got control of US Patent 6,128,415, which had originally held by Polaroid. The patent supposedly describes a setup for making sure images are consistent on a variety of different devices. Acacia/Digitech did what patent trolls do and basically sued a ton of companies, including NewEgg, Overstock, Xerox, Toshiba, Fujifilm and more.

A lower court kicked out the patent, and now CAFC has upheld that ruling, making use of the Alice ruling to make it doubly clear this isn't patentable. The court doesn't waste too much time, as the ruling is quite short. The key bits:

There is no dispute that the asserted method claims describe a process. Claims that fall within one of the four subject matter categories may nevertheless be ineligible if they encompass laws of nature, physical phenomena, or abstract ideas..... The Supreme Court recently reaffirmed that fundamental concepts, by themselves, are ineligible abstract ideas. Alice Corp. v. CLS Bank... In determining whether a process claim recites an abstract idea, we must examine the claim as a whole, keeping in mind that an invention is not ineligible just because it relies upon a law of nature or mathematical algorithm. As noted by the Supreme Court, “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” ... A claim may be eligible if it includes additional inventive features such that the claim scope does not solely capture the abstract idea.... But a claim reciting an abstract idea does not become eligible “merely by adding the words ‘apply it.’”

The method in the ’415 patent claims an abstract idea because it describes a process of organizing information through mathematical correlations and is not tied to a specific structure or machine.

[... Discussion of specific claim in the patent ...]

The above claim recites a process of taking two data sets and combining them into a single data set, the device profile. The two data sets are generated by taking existing information—i.e., measured chromatic stimuli, spatial stimuli, and device response characteristic functions—and organizing this information into a new form. The above claim thus recites an ineligible abstract process of gathering and combining data that does not require input from a physical device. As discussed above, the two data sets and the resulting device profile are ineligible subject matter. Without additional limitations, a process that employs mathematical algorithms to manipulate existing information to generate additional information is not patent eligible. “If a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.”

As Tim Lee notes, this ruling is great for folks opposed to software patents, and should send chills down the spines of those who support them. Because that basic reasoning can invalidate a hell of a lot of software patents.

Consider Google's famous PageRank patent, which covers the algorithm at the heart of Google's search engine. In the language of the Federal Circuit, it claims the use of "mathematical algorithms" (involving eigenvectors) to "manipulate existing information" (a list of links between web pages) to "generate additional information" (a ranking of the pages).

The number of software patents out there that use algorithms to manipulate existing information to generate additional information is... rather large. And they may all be invalid.

Filed Under: abstract ideas, algorithms, cafc, invalid, software patents
Companies: acacia, alice, cls bank, digitech, newegg, overstock, toshiba, xerox

In 'On The Internet' Patent Case, SCOTUS Gives CAFC 3rd Chance To Get It Right

from the try,-try-again dept

You may recall the important WildTangent v. Ultramercial case that has been going on for some time. This is the case in which the courts basically need to decide if merely adding an "on the internet' turns a basic idea into a patentable idea. In 2010 a court rejected Ultramercial's patent (7,346,545) on a process requiring people to watch an ad before getting access to content. However, the CAFC (court of appeals for the Federal Circuit) overturned that ruling, finding that taking a basic concept and adding "on the internet" to it made it patentable.

In 2012, following the Supreme Court's ruling in the Prometheus Labs v. Mayo case, that found medical diagnostics unpatentable, the Supreme Court told CAFC to try again on the Ultramercial case. Given another chance to get it right, CAFC again whiffed and insisted that this was patentable subject matter. In light of the recent ruling in CLS Bank v. Alice (which relied heavily on that Mayo ruling), the Supreme Court has told CAFC to maybe try one more time to see if it might actually get it right this time around, given the new guidance in the CLS Bank ruling.

In short, the Supreme Court seems to be telling CAFC: do we really need to draw a map for you here? Adding "on the internet" doesn't make something patentable. Now, the remaining question is whether or not CAFC will finally get that message.

Separately, it's also perhaps notable that the Supreme Court declined to hear the appeal in a different ruling, the Accenture v. Guidewire patent case, in which CAFC found the patent invalid based, in large part, on the Mayo ruling and the earlier CLS Bank CAFC ruling. Basically, here was a case where CAFC (properly) rejected a patent for being ridiculously overbroad, and now the Supreme Court doesn't have any concerns with that ruling. But in the Ultramercial case, where CAFC has twice upheld an overly broad patent, the Supreme Court is telling CAFC to try, try again.

Filed Under: cafc, on the internet, patentable subject matter, patents, supreme court
Companies: alice, cls bank, ultramercial, wildtangent

Supreme Court Rejects Software Patents On Performing Generic Functions; Pretends That Lots Of Other Software Must Be Patentable

from the a-step-in-the-right-direction dept

For a few years now we've been covering a key software patent case, Alice v. CLS Bank, which was another chance to show that pure software patents shouldn't be granted. As you may recall, four years ago, the Supreme Court got to tackle the question of software patents in the Bilski case, but chose to punt instead, rejecting that particular patent, and arguing that the specific test that everyone relied on shouldn't be the only test -- but otherwise leaving a lot of confusion in its wake. It did help dump a few software patents, but left the wider question pretty open.

We had hoped that when the Supreme Court agreed to hear the Alice case it wouldn't miss another chance to actually add some clarity to what is and what is not patentable. It seemed like the perfect opportunity. As you may recall, the original appeals court (CAFC) ruling was a complete disaster, with 135 pages of different opinions -- with only one single paragraph having a majority view, rejecting the specific patent. But no one could agree on why or the larger questions.

It was as if CAFC were practically begging the Supreme Court to provide clarity and guidance.

Unfortunately, the Supreme Court didn't really do that. It technically "upheld" the CAFC ruling (that one paragraph) rejecting the patent (which basically covered a computerized escrow service) as unpatentable subject matter. It further makes clear that merely taking an abstract idea and doing it "on a computer" doesn't make it patentable. That's all good... But, while three Justices (Sotomayor, Ginsburg and Breyer) hoped the court would go further and basically say that business methods weren't patentable at all, the rest simply wouldn't go along with that, saying that "many computer-implemented claims are formally addressed to patent-eligible subject matter," but never giving any examples.

Instead, it notes that you can't get a patent if each step claimed in the patent "does no more than require a generic computer to perform generic computer functions." Except, uh, many people will point out that's all that software does. That's basically how software works, but the Justices don't seem to recognize that. So, it's a bit of a conundrum. The court says many software patents are perfectly good because they apply to patent-eligible subject matter, but that if the claims do no more than require a generic computer to perform generic computer functions, it's not patentable. You could read that to mean that basically most software patents are no longer allowed, but... that's going to involve an awful lot of wasted litigation to teach a bunch of courts, including the Supreme Court, that basically all software involves generic computer functions.

Part of the problem is that, like many non-technical people, many of the Justice seems to think that software is a lot more than it really is. They seem to think that there's some magic in software that goes beyond just a bunch of instructions for a computer to follow. So, now they're saying that just taking some ideas and telling a computer to follow instructions to implement that idea is not patentable... but they still argue that there's plenty of software that is patentable. So it's... still really punting on the issue, in part because the Justices don't seem to understand software.

The court relies a lot on two other big recent rulings which we've covered -- the Mayo ruling that rejected medical diagnostic patents and the Myriad Genetics ruling that struck down gene patents, but doesn't quite go as far with software and business method patents. Instead, it sorta half rejects software patents, kinda, without going as far as it needs to go. As some folks are pointing out, the language used in the ruling is "going to tie folks in knots" as they try to figure out what it means.

In the long run, this may be a very important ruling. It's easy to read this ruling to basically reject a very large number of software patents. But, because of the unfortunately all-too-common nature of the Supreme Court semi-punting on clear decisions on this particular issue, it's not entirely clear where this ends up, meaning that there's going to be a lot of patent litigation citing this ruling, with both sides seeking to tap dance around the language choices. And that just means a few years down the road, it's quite likely that we'll be back here again, with the Supreme Court asked to decide, once again, whether or not software and business methods are really patentable.

Filed Under: business model patents, cafc, generic functions, patentable subject matter, patents, software patents, supreme court
Companies: alice, cls bank

Here's Hoping The Supreme Court Does Not Blow Another Opportunity To Fix The Software Patent Problem

from the ditch-those-patents dept

Four years ago, the Supreme Court had a chance to establish once and for all whether or not software was patentable. The Bilski case got all sorts of attention as various parties lined up to explain why software patents were either evil, innovation-killing monsters or the sole cause of innovation since the cotton gin and everything in between (only slight exaggeration). Rather than actually answer the question everyone was asking, the Supreme Court decided to rule especially narrowly, rejecting the specific patents at stake in the case and saying that the current test used to determine patentability (the so-called "machine-or-transformation" test) need not be the only test for patentability. However, it declined to say what tests should be used, leaving it up to the lower courts to start ruling blindly, making up new tests as they went along. And muddle along blindly they did -- right up to the height of pure absurdism in the CAFC (appeals court that handles patents) ruling in the Alice v. CLS Bank case, in which every single judge disagreed with each other. The ruling was 135 pages of confused mess where all justices only agreed on a single paragraph, which (like Bilski) said this particular patent was invalid, but no one could agree why.

In the wake of this, the Supreme Court agreed to hear the appeal, and once again it appears that tons of folks are lining up on the various sides, pushing the Supreme Court to either validate, toss out or at least provide a more clear test on the patentability of "abstract ideas" within the software context. The specific question the Supreme Court is being asked to resolve is:

Whether claims to computer-implemented inventions – including claims to systems and machines, processes, and items of manufacture – are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court.

The oral arguments were heard earlier today, and, as per usual, reveal little about what the Supreme Court is really thinking (trying to divine which way the court will land based on oral arguments rarely works out well). The Bilski ruling is mentioned repeatedly, and everyone seems to want to bend over backwards to not outlaw "software patents," but what we really need is for the Supreme Court to issue a clear ruling on what is and what is not patentable in this arena.

If you want to take a look at how we got here, including how the Supreme Court really outlawed software patents decades ago, only to then have the CAFC bring them back (in a big, bad way) while the Supreme Court was looking elsewhere, Tim Lee's final story at the Washington Post has all of the gory details. Jeff John Roberts, over at GigaOm has a nice compact piece on what's at stake directly in this case. Meanwhile, even the NY Times has weighed in with an editorial hoping the Supreme Court sets clear rules against abstract ideas being patentable.

Since the messy Bilski ruling, the Supreme Court has taken slightly more aggressive stances in ruling out controversial areas of patenting, including rejecting medical diagnostic patents and gene patents. While companies in both spaces have been trying to get around those rulings, on the whole, they were much clearer and more useful rulings than the messy Bilski ruling on software patents. While the current Supreme Court often seems gun-shy about establishing clear rules of the road on these kinds of issues, preferring to narrowly tailor rulings, hopefully the final ruling in Alice v. CLS Bank will not be the same mess the Bilski ruling left us with, which begat the CAFC's 135-page mess in Alice.

The Supreme Court had a golden opportunity four years ago to solve a big patent problem... and it blew it. Hopefully, this time it won't miss the opportunity.

Filed Under: bilski, escrow, patents, software patents, supreme court
Companies: alice, cls bank

Appeals Court Gets Yet Another Shot At Fixing The Software Patent Problem

from the pay-attention dept

The next big case to pay attention to concerning software patents appears to be the CLS Bank v. Alice Corp. case, which is being reheard "en banc" (by the full slate of judges) at the federal circuit court of appeals (CAFC). The short version of the case is that it involves a patent over the idea of software that conducts a "shadow transaction" to make sure that there are enough funds to complete a real transaction, before allowing the real transaction to go through, thus minimizing "settlement risk" (the risk of the deal not actually being completed). Should that be patentable? Well, that's part of the argument. The district court tossed out the patent as being simply about an "abstract idea," which is not patentable, as abstract ideas are excluded from section 101 of the patent act, which lists out patentable subject matter. On appeal, a divided three judge panel overturned the lower court, and said that when you looked at the invention as a whole, it was patentable subject matter under section 101. The full CAFC has agreed to rehear the case, and the amicus briefs are flowing in, as people realize that this case is the next key battleground over software patents.

Of course, as often happens in these kinds of cases, you get amicus briefs with wildly divergent claims. For example, here we'll show and discuss the briefs from both the EFF and the Business Software Alliance (BSA). Somewhat surprisingly, both of those briefs agree on one thing: that the actual patent in question should be ruled invalid, as in the district court ruling. But that's about the extent of the similarities between the two -- who paint extremely different versions of the world of software patents today. The EFF brief explains how damaging software patents are to innovation and the wider economy while the BSA brief talks about how software patents are the greatest thing ever for innovation. One of these three-letter-acronymed organizations is wrong, and it's not the EFF.

The EFF brief is quite detailed in how, where and how much software patents are doing harm to innovation and the economy. It explains how there's been an explosion in the number of patents applied for, granted... and being used in litigation. They also detail how the costs associated with patent trolling have gone out of control, and how large companies like Google and Apple both spent more last year on patents than they did on actual research and development. If you read Techdirt regularly, you've seen many of the arguments and data they present, but it's a great overview whether or not you're familiar with the situation.

Meanwhile, the BSA takes a rather... different view of the world. And, by "different" we mean the view that Microsoft (the BSA's largest supporter) would take, whereby software patents are just freaking awesome. It does this by first rewriting history. It claims that the patentability of software is a long-settled matter without any disruption at all. It does this by completely ignoring the reality -- often espoused by companies who are BSA members, including Microsoft -- that software was not realized to be patentable subject matter until after the State Street case in 1998. As we've noted many times, even Bill Gates used to claim that if everyone was patenting software in Microsoft's early days, the industry would have stagnated rather than grown. Of course, now that basically every tech company out there is more nimble and innovative than Microsoft, it seems to want to stagnate the world.

It then talks up the importance of software to the economy and innovation -- which is true -- but falsely argues that this massive growth in innovation exists because of patents, rather than in spite of them. It keeps insisting that software companies rely on patents to have the incentive to innovate. This is laughable. Seriously. Whoever wrote it should be ashamed. I deal with software companies all the time -- including many very, very successful ones. And the people there all tend to hate patents with a passion. The idea that these patents have been any form of incentive is simply ridiculous. But they claim that without patents, innovation might grind to a halt:

Simple economics makes clear that, if patent protection for software were curtailed, the adverse consequences would be swift and severe. With less profit to capture from the commercialization of the fruits of research and development, businesses would divert their resources into other ventures, and software development would suffer. That would have a ripple effect on productivity across the entire economy. Advanced software allows factory workers to be more precise, cars more fuel efficient, and healthcare more effective. Any new obstacles to software development would carry a penalizing multiplier effect that could threaten the continued technological advantage of the United States. For these reasons, “[d]iscrimination against a form of innovation that is increasingly critical to technological advancement, indeed that in many areas dominates technological advancement, makes no sense.”

Once again, there is no evidence to support this. None, zero, zilch. Because it's simply not true. The "simple economics" the BSA describes is wrong both in theory and in practice. The software industry was built up and became super successful in a time before most software companies -- including most BSA members -- got any software patents at all. Ignoring that is simply historical revisionism being used for the sake of blatant protectionism.

They then go on to argue that, basically, CAFC had better not change a damn thing, because any change to such "settled" law, would be a disaster. Somewhat amusingly, they quote a decade old paper from Mark Lemley to support the argument that software patents are here and never going away and everyone should stop complaining. Why is that amusing? Because much of the EFF brief also relies on Lemley -- but a much more modern Lemley. That is, the key to the EFF's brief is suggesting that the judges at CAFC use this case as a chance to put into practice exactly what Lemley suggested earlier this year as an "easy" solution to the issue of software patents. Rather than worry about Section 101 and what's patentable, focus on Section 112(f), which (effectively) says that you can't claim a broader function (such as the idea of easing settlement risk with shadow transactions), only the specific implementation of the proposed solution or invention.

As Lemley noted when he first published his paper on the subject, all this really needs is for judges to enforce the law as written -- and the EFF is suggesting that now would be a good time for CAFC to start actually doing that. While the BSA filing gives lip service to Section 112, arguing that it is a good reason why the courts shouldn't redefine Section 101 to not allow software patents, I do wonder if BSA folks would really be that happy if the courts suddenly started tossing out tons of software patents for violating section 112(f) by describing a general idea, rather than a specific implementation.

Either way, whether the court deals with these specific issues or somehow dances around them (again), it's clear that the CLS Bank v. Alice case is one worth following if you care about software patents.

Filed Under: cafc, functional claiming, mark lemley, patentable subject matter, patents, software patents
Companies: alice, bsa, cls bank, eff