Software and Business Method Inventions After Alice

Patent attorneys are often asked the question: “Is my idea patentable?”  Often the idea is related to software or business methods.  Well-known business methods include Amazon’s “1-click shopping” and Priceline’s “reverse auction.”  In the new digital economy, innovative software and business method models have given rise to new very successful companies such as LinkedIn, Uber, and Airbnb.  As important software and business method inventions are in the new digital economy, it is often unclear whether they can be patented.  This uncertainty is largely due to a legal rule that “abstract ideas” are not eligible for patent protection.  This rule originates from a long line of U.S. Supreme Court cases, with Alice Corporation v. CLS Bank International, decided in June of 2014, being the most recent and influential of these cases.  The basic rationale for the rule is a concern over so-called “preemption” of abstract ideas.  That is to say abstract ideas are the basic building blocks of science and industry, and allowing patents to monopolize abstract ideas can preempt the use of such basic building blocks.

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Federal Circuit is In Sync with Patent’s Validity Under Section 101

The Federal Circuit overturned a District Court ruling that a patent directed to automated lip synchronization and manipulation of animated characters’ facial expressions was invalid under Section 101 as being an abstract idea. The patent disclosed that this automation is accomplished through rules that aim to produce more realistic speech by taking into consideration the differences in mouth positions for similar phonemes based on context.

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Parent Company Furnishes Cancellation of Subsidiary’s Trademark Registration

Does your company’s wholly-owned subsidiary own trademarks in its own name?  Has your company acquired any companies that own trademarks?  If so, your company’s use of those trademarks will not prevent cancellation of those trademark registrations unless you have proper trademark license agreements in place.  This is exactly what happened to Floorco Enterprises, LLC’s NOBLE HOUSE trademark registration.  In a precedential decision, the Trademark Trial and Appeal Board (“TTAB”) cancelled Floorco’s trademark registration because only Floorco’s parent company was using the trademark and there was no trademark license agreement in place between Floorco and its parent company.

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The Federal Defend Trade Secrets Act vs. The California Uniform Trade Secrets Act

Although some version of the Uniform Trade Secrets Act (“UTSA”) has widely been adopted by most states, including California, variations among the versions and related judicial interpretation has led to uncertainty—particularly in today’s interstate economy where trade secrets and misappropriation easily may cross multiple states.

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Patent Office Adds Another After Final Option for Applicants – P3

This week, the United States Patent and Trademark Office (USPTO) announced1 the Post-Prosecution Pilot Program (“P3”) for applicants to respond to a final rejection in a utility patent application.  Under the P3, an applicant may participate in a conference with a panel of three examiners to review the applicant’s response to a final rejection.  To obtain entry into the pilot, an applicant must submit:

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PTO Cancer Immunotherapy Fast Track

In response to President Obama’s National Cancer Moonshot initiative to eliminate cancer, the USPTO has launched the “Cancer Immunotherapy Pilot Program.” The Pilot Program provides an accelerated review for applications related to cancer immunotherapy and is set to launch in July 2016. According to the USPTO, this initiative:

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En Banc: Federal Circuit Provides Guidance on Application of On-Sale Bar to Contract Manufacturers

Pharmaceutical and biotech companies breathed a sigh of relief Monday when the Federal Circuit unanimously ruled in a precedential opinion that the mere sale of manufacturing services to create embodiments of a patented product is not a “commercial sale” of the invention that triggers the on-sale bar of 35 U.S.C. § 102(b) (pre-AIA).[1]  The en banc opinion in The Medicines Company v. Hospira Inc., Case No. 14-1469 (Fed. Cir. July 11, 2016) considerably mitigates patent law’s disparate treatment of inventors who rely upon contract manufacturing organizations (CMOs) and an those who manufacture in-house.

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News of Note: July 13, 2016

Each week, Sheppard Mullin brings you News of Note in IP: The latest news in the IP-related fields of technology, privacy, fashion, advertising, music, and social media, curated by our IP team.  Here are some of the stories that we’ve been reading:

USPTO Launches Cancer Immunotherapy Pilot Program

In support of the White House’s $1 billion initiative to aid the fight against cancer, the USPTO has launched a pilot program to provide expedited review of patent applications directed to cancer immunotherapy.  The objective of the Pilot Program is to complete examination of patent applications containing claims to methods of treating cancer using immunotherapy within 12 months of a special-status grant.

The Next Battle Front in Net Neutrality: The Set-Box-Top

Long-time rivals Netflix and Comcast have confirmed that Comcast’s X1 interactive television box will offer Netflix, obviating the need for a smart TV or third-party device.  The companies have not announced whether users will also need Comcast Internet Services and, if so, whether watching Netflix will eat into the data plan.  But the partnership raises interesting net neutrality questions, since it could put Comcast in the position of choosing sides in the streaming video market.

Account Sharing: The Gray Area of Online Streaming

The Ninth Circuit issued an opinion last week that, the appellate court acknowledged, could turn password sharing among friends and family into a federal crime.  The appellate court concluded that an employee acted “without authorization” and in violation of the Computer Fraud and Abuse Act (CFAA) when he used an old coworker’s login (with permission) to access computer data owned by the former employer.

Spotlight on Nintendo: Go! Pokemon Go!

Nintendo is having its moment in the mobile-game-market sun.  Stock prices surged 36 percent after the Wednesday launch of Pokemon Go.  The mobile game quickly jumped to the number one spot in Apple’s iOS store, with $1.6M in daily revenue.   Rumors are that Trainers might even get real Pokeball controllers to use in the game. Nintendo has partnered with Tokyo-based gaming developer DeNa to develop its mobile games.  Fans are still waiting on the fabled Super Mario Bros. mobile game, but Nintendo’s next two games set to hit smartphones this fall.  For now, Pokemon Go is catching us all—often in unexpected ways.

You Oughta Be Encrypted

Facebook is rolling out a beta version of a new feature it calls “Secret Conversations.”  Facebook will use the Open Whisper Systems protocol, which is already used in WhatsApp, Allo, and Signal’s standalone app to offer end-to-end encrypted messages.  Facebook’s approach will have some key differences, such as the opt-in requisite and a single-device implementation.

TTAB Precedential Decision: Time Limit for Adding Claims Is Tolled by Filing of Cancellation Within Registration’s Fifth Anniversary

In a precedential decision, the Trademark Trial and Appeal Board (“TTAB”) held that the filing of a cancellation petition before the five-year anniversary mark of a registration tolls Trademark Act Section 14 for purposes of adding claims to a proceeding. Ashland Licensing & Intellectual Property LLC v. Sunpoint International Group USA Corp., Cancellation No. 92057294, 2016 TTAB LEXIS 219 (T.T.A.B. June 7, 2016) [precedential].

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News of Note in IP: June 20, 2016

Each week, Sheppard Mullin brings you News of Note in IP: The latest news in the IP-related fields of technology, privacy, fashion, advertising, music, and social media, curated by our IP team.  Here are some of the stories that we’ve been reading:

Microsoft Partnership Cashes In on Legal Marijuana Boom

Marijuana is now legal for medical or recreational use in 20 states, and a hefty crop of IT companies are sprouting up to support this industry.  KIND Financial, a leader in technology for cannabis compliance, has partnered with Microsoft to run its software on Microsoft’s Azure Government platform.

Net Neutrality Upheld for Third Time

A divided three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit upheld the Federal Communications Commission’s “net neutrality” rules in a really, really long opinion.  Under these rules, all broadband service providers are required to treat all content or internet traffic identically.  The ruling was a major victory for the Obama administration, which had pressed for the rules—but not everyone is thrilled.  Proponents of net neutrality rules include media celebrities like Stephen Colbert and John Oliver, the latter credited for inspiring 45,000 public comments to the FCC on the subject of net neutrality.

Deep Thunder: Weather is Big Business

The Weather Company, recently acquired by IBM, has a new commercial offering called Deep Thunder.  Deep Thunder combines independently developed versions of the government’s WRF forecast system to help businesses anticipate problems and to forecast retrospectively to better predict how variations in weather conditions affect everything from consumer buying patterns to business supply chains

Improving Public Transit One 3D-Printed Autonomous Bus At a Time

Meet Olli: Local Motors has unveiled its crowd-sourced, partially-recyclable, autonomous electric shuttle vehicle in D.C. this summer.  Olli utilizes IBM’s Watson cognitive learning software to take input from any language, translate it, take users to their destinations, and even learn user’s habits.

 Explosion of the Week: NASA Sets a Spacecraft on Fire—On Purpose

Some people just want to watch the world burn.  Apparently, that includes the folks at NASA.  To study how fire behaves in microgravity, NASA started a fire in Orbital ATK Cygnus cargo vessel, which whizzed around the Earth for eight days collecting data before ending its life in a much bigger ball of fire on reentry.  The experiment was the first in a three-part series of experiments, called Saffire, which NASA is conducting to study how flames grow in space.

FCC: 5G is Coming

The Federal Communications Commission (FCC) wants 5G wireless to be available starting in 2020 and has laid out its plans to push the technology forward.  Federal regulators announced plans this week for a mid-July vote on the so-called Spectrum Frontiers proceeding.