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.
Continue Reading Software and Business Method Inventions After Alice
Federal Circuit Reaffirms Its Longstanding Patent Exhaustion Precedents in Lexmark. v. Impression Products (Fed. Cir. Feb. 12, 2016) (en banc)
Under the doctrine of patent exhaustion, otherwise referred to as the “first sale doctrine,” the initial authorized sale of a patented item exhausts a patent owner’s rights to further control the sale, offer for sale, or use of the item. Bowman v. Monsanto Co., 133 S. Ct. 1761 (2013). In other words, once a patented article is sold to a buyer in a sale authorized by the patentee, the buyer, or any subsequent purchaser of the article, is free to use or resell the article without restraint from patent law. The doctrine of patent exhaustion thus seeks to prevent patent holders from receiving any overcompensation or potential double recovery, under the assumption that the patent owner has already received a just reward from the initial sale. Procedurally, an accused infringer can raise patent exhaustion as an affirmative defense in a patent infringement action.
Continue Reading Federal Circuit Reaffirms Its Longstanding Patent Exhaustion Precedents in Lexmark. v. Impression Products (Fed. Cir. Feb. 12, 2016) (en banc)