Supreme Court’s decision: an abstract idea is ineligible for patentability

The Supreme Court of the United States judged on a significant patent issue. The Court found in Alice Corp. Pty. Ltd. v. CLS Bank Int’l case that the method, system and computer readable medium claims of Alice’s four patents in question ineligible for patentability, because they sought to cover an abstract idea. The decision is based on the principle – and also clarifies – that you can’t get a patent on “abstract ideas”. This principle is also underpinned with precedents in the US case law.

Alice wanted to take out patents to methods, systems and a computer readable medium involving a computer-implemented scheme for reducing the risk that only one party to a financial transaction will pay, where a computer system served as a third-party intermediary.

But why were those patent claims ineligible for protection?

In this particular case the abstract idea is the involvement of an intermediary. However, the use of a simple computer implementation is not enough to transform that abstract idea into a patent-eligible invention. To be patentable the application of the abstract idea must lead to a new and useful end, as it is “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”

According to the 2012 two-step framework, “a court must first “determine whether the claims at issue are directed to” a patent-ineligible concept (like an “abstract idea”), taking into consideration “the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.””

Is this decision disadvantageous for the American business’s patent claims?

Not sure it is! If the use of the “abstract idea” for example leads to a new and useful outcome, it is patentable. But the simple use of a general computer is not able to transform a patent-ineligible abstract idea to a patent-eligible invention. Therefore, the mere use of a computer is not enough.

So what to do now?

It is worth for everyone who wants to apply for a patent to find a good patent attorney and consult him. An experienced expert could tell easier whether the idea is appropriate to get a patent or not, so we can spare money and time. The process is similar in case of a Unitary Patent. The Unitary Patent is the new type of European patent which will be valid in all the EU’s participating members.

Orsolya Lengyel

Source: Burns & Levinson LLP: Intellectual Property Update


When can we speed up on the Patent Prosecution Highway?

Bilateral patent agreements would help faster patenting. Do they really help?

The abbreviation PPH comes from the initials of the phrase „Patent Prosecution Highway”. Besides the Unified European Patent one should learn this new concept. PPH patent convention means a cooperation between the regional or national patent offices, based on bilateral agreement. The process starts on request and makes a faster patent examination possible for the applicants. It is possible that individual offices take the results of the work done by the partners into consideration and accept it.

The idea to spare unnecessary work for patent offices is basically good. Indeed it is also beneficial/advantageous from the inventors’ viewpoint if a patent application has been positively examined by the patent office of one country, and this result can be taken into consideration of the patent office of another country, thus reducing the evaluation time. At least in theory. As it is not obligatory for the office to take the results of the first one into consideration, it can get a different result.

The first PPH agreement was signed in 2006 between the patent office of Japan and the USA. This agreement was followed by several other agreements. Even a global PPH Program exists already, which was signed by several national patent offices. There are some basic requirements for participating in the program, and those offices which comply with them could be part of it. Several countries have extended the agreement for patents filed under the PCT international patent agreement. The most common case is that from a PCT Application it would also born a U.S. and European patent application, and it would be possible to take the advantages of PPH among them.

It is obvious that a PPH application has costs and it is only worth paying these costs if the PPH application really increases the chance of granting the patent. But does it really increase it? Some patent offices have published statistics which confirmed it, but other offices haven’t.

Patent attorneys’ experiences are miscellaneous, as there are both positive and negative examples. Canada for example is at the forefront of taking over other countries examination’s results, so a PPH patent application is recommended to be submitted there. Other countries, however, prefer to perform the examination themselves, and doubt the results received. The average practice shows that a PPH procedure shortens the time, as about one year can be spare with it. The patent is granted retroactively to the filing date. In case of substantive patent infringement, however, it is good to have the rights already given.

According to other experiences although it seems that PPH request increases the chance of granting the patent, in practice the grant strongly depends on the actual country. The five biggest offices (US, EP, JP, CN, KR) usually do not take over the results of smaller countries, so the advantages are questionable on their case, but their practice may change in the future. Given that the whole PPH system is not yet mature, we should wait for comprehensive experiences.

Orsolya Lengyel


Motorola was not fined by European Commission

The EU was always trying to harmonise the different fields of cooperation between the Member States. The goal is always the same: to make daily life easier and deepen the integration – in all senses. One of these areas is patent law. The European Patent or the Unitary Patent will soon enter into force, in 2015. It will make it possible to register a patent in all 25 countries simultaneously (the EU countries, except Italy and Spain). So it will become easier for inventors to validate a patent for the whole territory of the EU.

The EU, as part of its harmonised competition rules, made it clear on April 29 how EU competition rules should be applied when a company seeks to enforce injunctions based on SEPs.

SEPs (standards-essential patents) are those patents which are technically essential to implement a specific standard, such as 2G or 3G. Therefore they must be implemented on fair, reasonable and non-discriminatory (FRAND) grounds.

The European Commission found that Motorola abused its market position when seeking and enforcing a patent injunction against Apple. In a separate but related case the Commission accepted Samsung’s proposal and closed investigation.

There were some disagreements on what FRAND exactly means and what it includes, which have led some SEP holders to courts in Europe. These include Motorola Mobility and Samsung.

In the first case Apple agreed to pay its rival licensing fees on the 2G patent, after a court set the correct FRAND rate. However, Motorola temporarily enforced an injunction against Apple, before the U.S. company signed a “very restrictive” settlement. The decision against Motorola could be a precedent and provide some guidance to the industry, the commission ruled. Nevertheless because this is the first case of its kind, and because the national courts have different views, the Commission decided not to fine Motorola.

Samsung has been asserted several 3G patents against Apple in many EU Member States. The company also avoided a fine, more than three years after the commission began investigating the company.

Orsolya Lengyel

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