Intellectual Property

Boston College Law School

March 26, 2008

Software – Patent

Gottschalk v. BensonBinary Coded Decimal

53 = “5” “3”0101 0011

Pure Binary Number

53 = 1101010101 0011 110101

The method of converting signals from binary coded decimal form intobinary which comprises the steps of (1) storing the binary coded decimal signals in a re-entrant shift register, (2) shifting the signals to the right by at least three places, until there is a binary 1 in the second position of said register, (3) masking out said binary 1 in said second position of said register, (4) adding a binary 1 to the first position of said register, (5) shifting the signals to the left by two positions, ….

Cases After Benson

• Parker v. Flook (1978)– Method for updating alarm limits on computer to monitor pressure

– Held unpatentable: nothing more than an algorithm

• Diamond v. Diehr (1981)– Method for curing rubber w/ steps calculated by computer

– Held patentable: part of larger process, even if algorithm is the only new feature

• Freeman-Walter-Abele Test– (1) Does patent claim recite algorithm directly or indirectly?

– (2) If so, is invention as a whole nothing more than algorithm?

State Street Bank v. Signature

PooledMutualFund

A data processing system …comprising: (a) a computer processor means for processing data; (b) storage means for storing data …; (c) first means for initializing the storage medium; (d) second means for processing data regarding assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds’ assets and allocating the percentage share that each fund holds in the portfolio; ….

Software Patentability

• Requirements for Patentability– Subject Matter– Utility– Novelty– Nonobviousness– Enablement

Software Patents Issued by PTO

0

5000

10000

15000

20000

25000

1982 1986 1990 1994 1998 1999

Patents Issued

Nonobviousness

• Software difficulties– Lack of experienced patent examiners– No good classification system– No good body of documented prior art

• PTO efforts to address– Hiring experienced patent examiners– Cooperating w/ industry to document prior art– More involvement of industry in examination

Amazon v. Barnesandnoble

• Prior art references– Compuserve Trend

(stock chart purchase)

– Web Basket (shopping cart using cookies)

– Yesil Book (ref. to “Instant Buy Option”)

– Oliver’s Market (shopping cart)

– ‘780 Patent (web page delivery)

Hypothetical

• Facts– You have a programmer friend w/ software– Wants to market a program over the internet

• Questions– Does he need to worry about other patents?– Can he secure a patent himself?

Evaluation

• Arguments against– Increases costs of creating new programs

• Search costs• Licensing costs• Attorneys fees

– Advantages large players over small players– Not necessary– PTO ill-equipped to issue

• Arguments for– No different from other industries– Becoming increasingly capital intensive (e.g. Windows)– PTO issues are transitional issues

Sui Generis Proposals• Menell

– Based on patent system: same requirements– Faster approval– Shorter duration– Privilege for reverse engineering– Compulsory licensing of standards

• Samuelson, et al.– Sui generis framework– Short period of anti-cloning protection– Registration and licensing system

Administrative

• Next Class– Start Trademark

• Read through VI.B – Subject Matter