In our third and final discussion with Todd Miller, I asked him to answer the questions our readers had submitted on this blog and various other forums. Todd told us about the basics of patents, and how to deal with patent disputes in our last Q&A sessions.
It happened that on June 28th, the US Supreme Court had a patent case ruling related to “business methods” (Bilski v. Kappos), and many readers asked us to talk about this case. So I asked Todd to also tell us what the court was considering, what the ruling was, and how will it affect business moving forward. Given that I hold a few business patents, this was of particular interest to me personally.
SECTION I: Reader questions
Do you have a list of reference sites to see if a process, formula, or tangible product has already been patented? Also, if someone were (more or less) uninformed on how to conduct a targeted search, how would he or she search to see if his or her idea has already been patented?
The best site is http://www.uspto.gov/. There, the U.S. government provides a number of ways to search to see if an idea has already been patented. In particular, you’ll want to refer to http://www.uspto.gov/patents/process/search/index.jsp. What I typically do is conduct a Boolean search at http://patft.uspto.gov/netahtml/PTO/search-bool.html. There, you can search by field, such as by title, abstract, summary of the invention, claims, etc. Plug in key words to your invention and review what results, if any, pop up.
The European Patent Office has a fine site at http://ep.espacenet.com. Also consider using WIPO’s PATENTSCOPE® service at http://www.wipo.int/patentscope/en/.
Google also has full-text searchability of some 7 million patents offered at http://www.google.com/patents. Google highlights your search terms and allows the patent to be easily downloaded. But in my experience, Google’s database does not contain the most recent patents or the published applications. The USPTO’s site does.
Google Scholar is also a terrific resource. Subscription tools such as Dialogue are also wonderful.
How do you place a value on certain patents when there is no market? Does one use the dollar value of the attorneys’ fees?
Where there is no established market, a patent’s value still goes back to basics, in other words, the amount a buyer is willing to pay. In setting a price, consider looking at analogous established markets for guidance. Also consider what income, cost-savings, or other benefits may accrue to a user of the claimed invention.
Will you accept infringement litigation on a contingency basis?
Yes.
Can you tell us a little more about patent infringement? How is the average person supposed to know whether a product or process infringes?
This question is a complicated one answered by the jury, or judge if there is no jury, during every patent trial unless infringement has been stipulated or is otherwise not an issue. Patent infringement is a two-step process. First, the claims are construed as a matter of law based upon how one of ordinary skill in the art would understand the claims at the time of the invention. The claim scope is then compared to the accused product or method as a matter of fact. To infringe, the accused product or method must embody each limitation in the claim, either literally or by a substantial equivalent.
Here’s an example that I give when teaching. Supposed the asserted claim is: “A bicycle comprising: a first wheel, a second wheel, and a frame linking the first wheel to the second wheel.” If the accused device is a unicycle, there is no infringement. The claim requires at least two wheels, and the accused device only has one. Since the accused product does not embody each limitation in the claim, there can be no infringement. When teaching, I take this rather simple example and expand upon it to show how complex the issues can quickly become. For example, does a motorcycle infringe this claim? What about a car? What about a device with a wheel and a block and a frame linking the wheel to the block? To me, it’s all richly engaging.
SECTION II: The Supreme Court decision on Bilski
Can you tell us what was at issue in Bilski?
Generally speaking, the Supreme Court considered whether to exclude business methods from patent protection.
Can you give my readers an example of what you mean by “business methods”?
The simplest example is the business method claimed by Bilski, namely, instructing how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. Other examples of business methods include tax strategies, e-commerce, banking, and insurance schemes.
Did the court decide to exclude business methods from patent protection?
No. The Supreme Court was unwilling to exclude all business methods from patent protection.
Did the court rule that Bilksi’s business method was patentable?
No.
Why not?
Bilski was attempting to patent a mathematical formula that covered the basic concept of hedging risk. An abstract idea, law of nature, or mathematical formula is not patent-eligible.
How does Bilski affect doing business moving forward?
Business methods will continue to be patentable. However, any attempt to patent a mental process, algorithm, mathematical formula, or fundamental principle that does not require a particular machine, article, transformation, or application will be met with rejection at the United States Patent and Trademark Office.
What about the patents that are already out there covering business methods?
Those patents are presumptively valid. But challengers will point to Bilski to argue that not all business methods are patentable. Should the claims cover an abstract idea, or merely limit the use of an abstract idea or add insignificant postsolution activity, a challenger may say these claims are invalid, just like they were in Bilski. A challenger may also say that the claims are invalid as being obvious where the claims cover a mathematical formula or the like known in the prior art.
Any other thoughts?
Post-Bilski, the Supreme Court has suggested that the Federal Circuit continue to develop tests to determine what is patent-eligible subject matter. Including the recently remanded Mayo Collaborative Services v. Prometheus Laboratories Inc., there are about six other cases ripe for Federal Circuit clarification regarding the patentability of business methods, software, medical, or other processes. In the meantime and no doubt for some time afterwards, expect to see more rather than less prosecution and litigation on what is patent eligible or obvious if the formula, algorithm, etc. is known in the prior art.
Todd R. Miller is a trial attorney who represents clients in high-stakes, complex intellectual property disputes. He has particular experience in patent litigation arising in the electronics, computer, semiconductor, and software industries. Having tried and won matters before jurors, judges, and arbitrators, Todd is a seasoned litigator who efficiently and effectively advocates the case to obtain client goals. More at: http://www.jonesday.com/trmiller/
The answers provided reflect only the present considerations and views of Mr. Miller, and should not be attributed to Jones Day, or to any of his or its former or present clients.
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