We are now experiencing the days when computers are replacing human skills and business methods are not created with human intuition but by algorithms. Both European and US companies thriving in the sector of computer intelligence and technology for the financial sector have frequently encountered this problem of IP strategy: can our software or business method invention be considered patentable?
Let's start by answering the obvious question, namely the meaning of an "Alice" rejection. On June 19 2014, the United States Supreme Court issued a landmark decision in the case Alice Corporation Pty v CLS Bank International, addressing the long-debated issue of subject matter patentability criteria, especially regarding the field of computer-implemented business methods.
As background, Alice Corporation (the patent assignee) applied to the USPTO to register several patents that disclosed a computerised method for reducing "settlement risk" in all transactions between two parties. The claims of the patent therefore included elements designed to improve the exchange of financial obligations between two parties, aimed at hedging the risk of a unilateral payment.
The opponent (CLS Bank) claimed that this subject-matter was not patentable under rule 35 USC § 101 (definition of patentable subject matter), since it does not insert an improvement in the functioning of the computer itself or add "something more" in the technological field. Upholding the opponent's claims, the Court characterised the claims as an abstract idea in finance (a theory without a technical application) and thus non-patentable. A considerable number of patent refusals and invalidations followed the case, creating an environment of uncertainty for companies as petitioners regarding how the PTO "reads" patent claims on computer-based method inventions.
As the years went by and despite three sets of guidelines issued by the USPTO for examination under Alice, many attorneys and petitioners found themselves facing Alice rejections from patent examiners at an increasing rate.
The EPO and the USPTO
European patent law, in contrast to US patent law, explicitly excludes computer-implemented business methods from patent protection. Nevertheless, these exclusions are applied after complicated considerations, making it still possible - if claims are carefully drafted - to obtain European patent protection for inventions relating to a software and/or business context.
Decision T 0641/00 (Two identities/COMVIK) of 26 September 2002 (regarding a digital mobile telephone system and the use of a single-user multi-identity IC card as subscriber identity module in a mobile unit of a GSM-type system) is considered a benchmark for assessing the patentability of software-related inventions in Europe. The focal point of the decision was that a claim with a combination of technical and non-technical features is generally patentable under EPO rules. Nevertheless, an inventive step is only assessed on the basis of the technical features of the invention.
Under the EPC, a computer program claimed "as such" is not a patentable invention (Article 52(2)(c) and (3) EPC). For a patent to be granted for a computer-implemented invention, a technical problem must be solved in an innovative and non-obvious manner. Nevertheless, the EPO has been tending to largely advocate software patents over the last year.
From another view, EPO and USPTO patentability approaches have certain common points which can be used as "coordinates" to draft patent claims in software/business method implementations related inventions. Creating a risk-based strategy for a successful patent application to both offices is no easy task. The petitioner must draft an effective, systematic application strategy with patent examiner and art unit data.
Tips to overcome a potential Alice rejection
For present purposes, we can see "in action" how the EPO and USPTO patent lawyer/petitioner can engineer their application to achieve registration by articulating the step-by-step approach and accordingly propose tips to prevent a potential Alice rejection.
Example: An inventor wants to file a patent registration for an invention relating to a system which provides airtime advance on a mobile communications network. The method used for the airtime advance service platform determines whether a subscriber is eligible for airtime advance. If the subscriber is eligible for airtime advance, the method credits an account associated with the subscriber with the amount of the airtime advance.
When examined by both the EPO and the USPTO, the patent must meet the following criteria:
- Stage 1: The claimed invention must include technical features (EPO) or the claim must NOT fall within the categories of art 101 (statutory categories of invention). In this case, we are talking about a system in a computer, so stage 1 can be completed.
- Stage 2: Does the claim include technical and non-technical aspects (EPO) or is there an abstract idea in the claims that needs to be further evaluated (USPTO)? The above patent includes technical features (i.e. airtime advance service platform per embodiments of the invention being implemented on two distributed server computers which are managed by a cluster manager) and non-technical (i.e. which is the method itself). This method, the calculations and the mathematical denominators of the patent could be described by a USPTO examiner as "abstract idea".
- Stage 3: Are the technical differences in the claims drafted such that, when compared with prior art, the non-technical aspects of the invention present an "inventive step" (obviousness element in EPO) or do the claims amount to something "significantly more" than the abstract idea itself (USPTO)?
If the claims fulfill the above, the patent must be accepted. For example, the petitioner must make clear in the claims that the theoretical method is strictly attached to the technical features of the system so that it can be considered a sine qua non-element of the system's operation. If not, the patent will be considered an "Alice" patent, namely that the claims simply instruct the platform operator to implement the abstract idea of subscriber eligibility on a generic computer.
Pay attention to this
It is clear at this point that researching of prior art, claim drafting and art unit research are crucial success factors. The applicant will draw his attention to the following:
- Careful prior research of the art units within which the invention may fall, since allowance rates vary widely among art units and, of course, perform research on the examiner rates. It has been observed that 85% of the cases are rejected based on the examiner and examiners mainly operate independently. The petitioner of a software invention can thus point out the most relevant art unit and then research more on the acceptance rates and compare with other applicable art units (for example USPTO's Technology Center (TC) 3600 is full of Alice rejections).
- Read the Offices Guidelines: both offices regularly issue guidelines on the patent application procedure as well as the patent examination procedure. There are many indications in these documents as to what the claims must include for such patents to be accepted. In any case, these are the same guidelines that must be followed by the examiners so one can have a clear idea as to the reasoning procedure in each patent application. We must not forget that examiners are policy implementers and not policy makers. They must comply with the Office's official policy and follow the regulations.
- Engineer the application cautiously: Acting from an informed position when drafting a patent application is crucial. Using the right key words for the patent specification will not only direct the application to the desired art unit but also enable the examiner to understand the technicalities of the patent and so it is not easily rejected. Expressed in one sentence, the principle target is to try putting the invention into the context of an element of hardware so that technical feature (ΕPO) and non-abstract idea prerequisites (USPTO) are met. Learning from the "Alice" case, the applicant should specifically underline an inventive concept if the invention is leaning towards an abstract idea.
- Read the Gazettes: In this way, the petitioner can examine the preambles and descriptions from other patent fillings and understand in depth the classification system in each office.
- Use the right toοls and the right experts: Using an experienced and confident professional in patent application can prove to be the key to success. Professionals in the field know the examiners, understand the drafting details and have experience of the application outcomes. Additionally, they know how to use the right tools for patent databases, archives of the patent offices, lawyer's databases etc.
- Talk to the examiner: Examiners are not the applicants' enemies. Their job is to enhance the patent office efficiency and operation. This approach can resolve any issues in a timely, effective and efficient manner, in the sense that it allows discussion of any objection raised by the examiner regarding the patentability of the subject matter and any details that the examiner wants to see added to the claims.
Road to innovation or monopoly risk?
In general, software and computer-implemented business method patents have been the centre of the attention for many years now on both sides of the Atlantic, especially after the Alice decision. Some sceptics of software patenting claim it could monopolize an entire technological field.
On the other hand, allowance of software patents in both Europe and US can be considered an innovation catalyst for start-ups. In any case, drafting a software patent that can navigate its way through Alice rejections is challenging but not insurmountable. If the applicant is vigilant with the claims and attentive to the examiner's views, allowances can be granted.
Attorney at Law
LLM Commercial Law