**Fintech IP** William Fisher 2022/11/07
  Business Strategy
    Business Models
      Focus on niche businesses, not comprehensive sets of services
        Cautionary tale of Libra
      Maximize interoperability
        Upstream interoperability, to enable consumers to engage with legacy businesses
        Downstream interoperability, to facilitate emergence of complements
          Cautionary tale of Apple
            Apple_Error.pptx
      Attend to Direct Network Effects
        E.g., scale up fast
        Instructive tale of fax machines
      Seek opportunities for Differential Pricing
        As yet, rarely employed by fintech innovators
          e.g., fintech insurance companies focused on reduction of costs and customization, not differentiation of groups of potential consumers
    Branding
      Brand_Experience.pptx
      Brand Experience dimensions for financial products
        Utility
          Defined nationally or regionally
          e.g., importance in Europe of seamless integration with banks
        Security
        Privacy
          e.g., especially strong concern for privacy in Europe in general and Germany in particular
        Prestige
          Positional services: veblen and snob effects
            Veblen_Snob.pptx
          Avoid association with criminal activity
    IP Strategy
      IP Strategies in General
        Tfisher.org: Strategy
      Fintech IP
        If possible, incorporate <u>technical</u> innovations in business model
          Maximize potential for patentability in all major jurisdictions
          Examples
            Amazon’s palm-print payment system
              Amazon_One.pptx
            Paypal’s pending application for a payment system using augmented-reality glasses
              Paypal_AR.pptx
            Bank of America’s application for advanced security system
        Aggressive TM protection to reinforce branding
          Select fanciful mark (with positive connotations)
            Avoid need to establish secondary meaning to secure protection
          Register in all plausible jurisdictions as soon as possible
            Cautionary tale of Telegram Messenger Inc. v. Lantah, LLC (ND Cal 2018)
              Use of “GRAM” for a cryptocurrency
              Neither party registered the TM before making substantial investments; Lantah lost & both paid large legal fees
            By registering in multiple countries, minimize hazard of being unable to establish personal jurisdiction over competitors
            For Europe, use Community Trademark System
            Madrid Protocol facilitates global protection
              After filing domestic application, applicant may file international TM application in home office
–if int’l application is filed within 6 months of basic application, get date of priority
              Application forwarded to WIPO, which:
–issues international registration
–publishes in Les Marques Internationales
–forwards application to designated member countries
              National offices examine application for conformity with national laws
–if no action within 1 year, deemed registered
              Currently 124 countries, including US
          In US, genuine use in commerce as soon as possible is imperative
            Advance purchase agreements deemed sufficient in Lantah
          Careful use of publicity to avoid genericity
        Minimize reliance on copyright, trade-secret, and database protection
  Law Reform
    IP Theory in General
      Tfisher.org: Theory
    Welfare Theory
      welfare objectives for fintech
        Provide adequate incentives for innovation -- but no more than necessary
          Consider whether alternative motivations for fintech advances already exist
        Minimize distortions: biases in favor of fields where rewards for innovation are disproportionate to social value
        Limit the pernicious effects of market power
          Limit its acquisition, or
          Limit its exercise
            cf. SSOs and treatment of SEPs
        Facilitate interoperability
      possible reforms
        Consider expansion of patentable subject matter
          Reduce distortions caused by requirement of technical effect/industrial application
          But may not be appropriate in light of the intensity of innovation despite limited patent protection
        Heighten Inventive-step requirement across the board
          Fintech_Inventive_Step.pptx
        Limit trademark infringement to consumer confusion
          Curtail or eliminate dilution doctrine
            USA
              Before 1925, courts are unreceptive to such claims
                Borden (CA7 1912)
              1925-1935: State and Federal courts begin to reach dilution
                Rolls-Royce (CA3 1925)
                Dunhill (SDNY 1929)
                Tiffany (NY 1933)
              State Anti-Dilution Statutes largely displaced the common law
                e.g., Mead (CA2 1989)
              Federal Anti-Dilution Statute of 1995
              Nabisco (CA2 1999)
                Facts
                Holding
              Victoria’s Secret (SCOTUS 2003)
                Facts
                Tarnishment and Sexuality
              Trademark Dilution Revision Act (2006)
                resolves debate concerning proof of injury
                adjusts factors relevant to proof of blurring
              Requirements
                P's mark is famous
                  e.g., Top Tobacco
                P's mark is distinctive
                D uses its mark in commerce
                D's usage began after P's mark became famous
                D's use is likely to cause dilution
                  Blurring
                    (1) Degree of similarity between the marks
                    (2) Degree of distinctiveness of P’s mark
                    (3) Extent to which P’s use is exclusive
                    (4) Degree of recognition of P’s mark
                    (5) Whether D intended to create association
                    (6) Any actual association
                  Tarnishing
                    harm to the reputation of P’s mark
            EU
              EU TM Directive (1988 & 2008), Art. 5(2)
                Any member state may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark [in relation to goods or services which are not similar to those for which the trade mark is registered], where the latter has a reputation in the Member State and where use of that sign without due cause takes <u>unfair advantage of, or is detrimental to, the distinctive character or the repute</u> of the trade mark.
              Davidoff v. Gofkid (ECJ 2003)
                tacitly delete the restrictive phrase: "in relation to goods or services which are not similar to those for which the trade mark is registered"
        FRAND licensing for patents pertaining to dominant fintech platforms when they emerge
          Mathew Heim and Igor Nikolic
    Cultural Theory
      cultural objectives for fintech
        Augment or protect relevant aspects of the good life
          Competence
          Privacy
        Distributive justice
      Possible reforms
        Enforce disclosure requirements for financial services and investment opportunities
          Private cause of action
        Strict enforcement of privacy rules
        Facilitate differential pricing
          e.g., geographic price discrimination for services
  IP Protection
    Patents
      Requirements
        1. Eligible Subject Matter
          General Principles
            Potential Reasons for Limiting Subject Matter
              1. Necessary Evil
                Patents have socially undesirable side effects; they should be used only when essential to stimulate innovative activity that otherwise would not occur
                e.g., Senator Frist, justifying 35 USC 287(c)
                  “[I]nnovations in surgical and medical procedures do not require the midwifery of patent law."
              2. Excessive Scope
                Patents should not reach unduly large territories
              3. Proportionality
                The rights conferred by a patent should be proportional to the effort that went into it and/or to the benefit it confers on society
                e.g., DDR Holdings (CAFC 2014) (Mayer dissenting)
                  “ The potential scope of DDR's patents is staggering, arguably covering vast swaths of Internet commerce. DDR has already brought infringement actions against ten defendants, including Digital River, Inc., Expedia, Inc., Travelocity.com, L.P., and Orbitz Worldwide, LLC. See J.A. 255-63; ante at 1250. _DDR's claims are patent ineligible because their broad and sweeping reach is vastly disproportionate to their minimal technological disclosure._ See Mayo, 132 S.Ct. at 1303 (In assessing patent eligibility, "the underlying functional concern ... is a relative one: how much future innovation is foreclosed relative to the contribution of the inventor.”).”
              4. Protect Opportunities for Downstream Innovation
                e.g., Myriad/Mayo
                  “We have “long held that this provision contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable.” *Mayo*, (slip op., at 1) Rather, “‘they are the basic tools of scientific and technological work’” that lie beyond the domain of patent protection. As the Court has explained, without this exception, there would be considerable danger that the grant of patents would “tie up” the use of such tools and thereby “inhibit future innovation premised upon them.” This would be at odds with the very point of patents, which exist to promote creation.”
              5. Nationalism/Mercantilism
                If lawmakers in country A think that firms in country A lead in technological development with respect to field X, then they should advocate extension of subject-matter coverage to inventions in field X, both domestically and internationally
                If lawmakers in country A think that firms in country A do (and will) lag firms in other countries with respect to field X, then they should advocate elimination of subject-matter coverage to inventions in field X, both domestically and internationally
              6. Hubris
                Humans should not assert rights to the work of the gods
              7. Pandora’s Box
                Unconstrained curiosity will release uncontrollable evils into the world
                Patent law should not encourage inventive activity in sectors that will plague humanity
              8. Sector-Specific Opposition to Privatization
                e.g., Hippocratic Oath with respect to medical procedures
                  Louis Lasagna version (1964)
                    I swear to fulfill, to the best of my ability and judgment, this covenant:
                    **I will respect the hard-won scientific gains of those physicians in whose steps I walk, and gladly share such knowledge as is mine with those who are to follow.**
                    **I will apply, for the benefit of the sick, all measures [that] are required**, avoiding those twin traps of overtreatment and therapeutic nihilism.
                    I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon's knife or the chemist's drug.
                    I will not be ashamed to say "I know not," nor will I fail to call in my colleagues when the skills of another are needed for a patient's recovery.
                    I will respect the privacy of my patients, for their problems are not disclosed to me that the world may know. Most especially must I tread with care in matters of life and death. If it is given me to save a life, all thanks. But it may also be within my power to take a life; this awesome responsibility must be faced with great humbleness and awareness of my own frailty. Above all, I must not play at God.
                    I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability. My responsibility includes these related problems, if I am to care adequately for the sick.
                    I will prevent disease whenever I can, for prevention is preferable to cure.
                    I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.
                    If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help.
                e.g., Free Software Movement
                  Ricard Stallman’s manifesto
                    Users' control over the program requires four [<u>essential freedoms][1]</u>.
[1]: https://www.gnu.org/philosophy/free-sw.html
                    (0) The freedom to run the program as you wish, for whatever purpose.
                    (1) The freedom to study the program's “source code”, and change it, so the program does your computing as you wish. Programs are written by programmers in a programming language—like English combined with algebra—and that form of the program is the “source code”. Anyone who knows programming, and has the program in source code form, can read the source code, understand its functioning, and change it too. When all you get is the executable form, a series of numbers that are efficient for the computer to run but extremely hard for a human being to understand, understanding and changing the program in that form are forbiddingly hard.
                    (2) The freedom to make and distribute exact copies when you wish. (It is not an obligation; doing this is your choice. If the program is free, that doesn't mean someone has an obligation to offer you a copy, or that you have an obligation to offer him a copy. Distributing a program to users without freedom mistreats them; however, choosing not to distribute the program—using it privately—does not mistreat anyone.)
                    (3) The freedom to make and distribute copies of your modified versions, when you wish.
                  e.g., Eben Moglen, “dotCommunist Manifesto”
          USA
            Constitution, Art I, Section 8, Clause 8
              "The Congress shall have power … to promote the Progress of science and useful arts, by securing for limited times to authors and inventors, the exclusive right to their respective Writings and Discoveries"
            35 USC 101
              Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
            Specific Subjects
              Life Forms
                Microorganisms
                  Diamond v. Chakrabarty (1980) (5/4)
                    Facts: “This human-made, genetically engineered bacterium is capable of breaking down multiple components of crude oil. Because of this property, which is possessed by no naturally occurring bacteria, Chakrabarty's invention is believed to have significant value for the treatment of oil spills.”
                    “The Committee Reports accompanying the 1952 Act inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S.Rep.No.1979, 82d Cong., 2d Sess., 5 (1952); H.R.Rep.No.1923, 82d Cong., 2d Sess., 6 (1952).”
                    “[T]he patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. _His discovery is not nature's handiwork, but his own; accordingly it is patentable subject matter_.”
                Plants
                  International
Agreements
                    UPOV
                      History
                        Union International Pour La Protection des Obtentions Vegetales
                        Formed 1961
                        Modified 1972, 1978, 1991
                        USA joins 1978 version in 1981, with reservation to avoid exclusivity
                        USA joins 1991 version in 1999
                        Membership: 54 Countries
                      Content
                        Member states must provide protection for new, distinct, uniform, stable plant varieties
                          Arts. 2, 5-9
                        Breeder's rights shall include, with respect to the protected variety and to any "essentially derived" variety, the following exclusive rights: (Art. 14)
                          reproduction
                          conditioning for the purpose of propagation
                          sale or offering to sell
                          importing or exporting
                        Exceptions (Arts. 15-16)
                          private and noncommercial acts
                          acts for experimental purposes
                          acts for the purpose of breeding other varieties
                          (optional) farmers' right to save and plant seeds
                        Duration (Art. 19)
                          20 years from grant
                          for trees and vines, 25 years from grant
                        National Treatment Principle (Art. 4)
                        1-year priority right (Art. 11)
                    TRIPS
                      Member states may decline to provide patent protection for plants -- Art. 27(3)(6)
                      But if so, must provide "sui generis" protection
                  Plant Protection Act (1930)
                    subject matter
                      new, manmade plant varieties
                        variety = subspecies showing distinctive characteristics
                        no protection for discovered naturally occurring varieties
                        but protection does extend to "cultivated" new varieties, even if they arise spontaneously
                    requirements
                      ordinary utility patent requirements, except:
                        disclosure and enablement satisfied if written description is as complete as "reasonably possible"
                    infringement
                      reproduction through grafting or other forms of asexual reproduction, or sale of asexually reproduced copies
                      n.a. to reproduction through seeds
                      n.a. to independent invention
                        Imazio Nursery (CAFC 1995)
                    in practice
                      shields nurseries against reproduction of ornamental plants and fruits
                        examples
                      largely irrelevant to food staples
                  Plant Variety Protection Act
                    Subject Matter
                      plant variety = "a plant grouping within a single botanical taxon of the lowest rank"
                        7 USC 2401(a)(9)
                    Requirements
                      new
                        as of the time of application, the variety has not been sold or given, by the breeder or with his consent, to anyone
                          in US, more than 1 year before
                          outside the US, more than 4 years before (or 6 years before, if it's a tee or vine)
                      distinct
                        clearly differentiable from any other known variety
                      uniform
                        any variations are describable, predictable, and commercially acceptable
                      stable
                        if reproduced, will remain stable to essential characteristics
                    Procedure
                      examination by Plant Variety Protection Office (within USDA)
                        seed deposit
                      administrative appeal to Plant Variety Protection Board
                      judicial appeal to District Court or CAFC
                    Infringement
                      sell, offer to sell, or transfer possession
                        Delta & Pine Land Co. (CAFC 1999): requires scienter
                          defendant knows or has reason to know that transfer is infringing
                      import or export
                      reproduce
                      use the variety in producing a hybrid
                    Exceptions
                      "any act done privately and for noncommercial purposes"
                      plant breeding
                      bona fide research
                      "saved seed" for use on the farm
                        Asgrow (1995): a farmer who meets the requirements set forth in sec 2543's proviso may sell for reproductive purposes only such seed as he has saved for the purpose for replanting his own acreage
                      compulsory license
                        Secretary of Agriculture may order, for 2 years, provided
                          (a) reasonable royalty
                          (b) necessary to maintain adequate food supply
                    Scope
                      the variety itself
                      a variety "essentially derived" from the protected variety
                      no equivalents doctrine
                      practical effect: almost impossible to infringe unless you begin with the protected variety itself
                        analogous to copyright
                        contrast patent
                    Term
                      20 years from grant
                      25 years from grant for trees and vines
                    In practice
                      primarily used to shield new forms of staple crops
                        soybeans
                        corn
                      Usage data
                      very little litigation
or licensing
                        suits mostly against farmers who exceed "saved seed" exemption
                      easy for competitors to circumvent
                    Is it effective?
                      i.e., does it stimulate R&D in plant varieties?
                      enthusiasts
                        Gasser & Fraley, "Genetically Engineering Plants" (1989)
                        Lesser & Mason, Economic Analysis of the PVPA (1985)
                        Evanson, "IP Rights and Agribusiness" (1983)
                      skeptics
                        Kloppenberg, "First the Seed" (1988)
                        Butler (1985 & 1996)
                        Alston & Venner, "The Impact of the PVPA on Wheat" (2000)
                        Janis & Kesan, "Sound and Fury" (2002)
                  Utility Patents
                    extended to new, manmade plant varieties
                      Hibberd (1985)
                        PTO practice post Hibberd: 1800 patents on plants
                      Pioneer Hi-Bred (2001)
                    requirements
                      utility
                      novelty
                      nonobviousness
                      disclosure
                        PTO Regs: depositing seeds in depository open to the public is sufficient
                    infringement
                      "make, use, or sell" the patented plant
                        does this reach "innocent infringement"?
                          e.g., by pollen drift
                        Cf. Schmeiser v. Monsanto (Canada 2002)
                          Schmeiser's replication of "Roundup Ready" canola was not innocent because he know or had reason to know of the patent
                        North Dakota statute: patentees must designate "independent laboratories" to test crops to determine patent infringement
                      potentially more expansive claims than under PPA or PVPA
                      equivalents doctrine
                    exceptions
                      experimental use
                        Should it be expanded to parallel breeder's exemption under PVPA?
                      no "saved seed" exception
                        Monsanto v. McFarling (CAFC 2002)
                    usage
                      likely to rise with perceived inadequacy of PVPA
                      likely to rise with increased economic importance of genetically modified crops
                  Nonpatent forms of protection
                    Trademark
                      Passing Off Theory
                        Y produces new plant variety
                        advertises and sells seeds as X's
                      Reverse Passing Off Theory
                        Y buys X's seeds, reproduces them
                        sells them as Y's new variety
                      Registration Systems
                        Creator of a new plant variety registers it
                        Creator is then protected against passing off by competitors
                        France, Netherlands, Germany
                    Contracts
                      "Bag Tag" Licenses
                        "Resale of this seed for planting is strictly prohibited"
                        seeds may be used for planting a commercial crop only in a single season
                        purchaser may not save any seed for replanting or supply saved seed to anyone for replanting
                      enforceable?
                        arguably illegitimately curtails doctrine of patent exhaustion
                        arguably a contract of adhesion
                          cf. Clevenger dissent in McFarling
                    Technology
                      terminator genes
                Animals
                  Animals are patentable
                    Ex parte Allen (1987)
                    ALDF v. Quigg (CAFC 1991)
                  No patents on claims on or "encompassing" a human being
                    Newman (PTO final rejection (2004))
                    Weldon Amendment (2004)
                    AIA 33(a) (2011)
                  Cloned animals are not patentable
                    In re Roslin Institute (CAFC 2014)
                      “ Here, as in Myriad, Roslin "did not create or alter any of the genetic information" of its claimed clones, "[n]or did [Roslin] create or alter the genetic structure of [the] DNA" used to make its clones. Myriad, 133 S.Ct. at 2116. Instead, Roslin's chief innovation was the preservation of the donor DNA such that the clone is an exact copy of the mammal from which the somatic cell was taken. Such a copy is not eligible for patent protection.”
              Stem Cells
                Patentable in US, China, India
                Brustle v. Greenpeace (ECJ 2011)
                  Stem cell patents challenged as inconsistent with EU Biotechnology Directive
                  Holding: An invention is excluded from
patentability if the process requires either
the prior destruction of human embryos or
their prior use as base material, even if the
application does not refer to the use of
human embryos. Furthermore, the CJEU
concluded that scientific research entailing the use of human embryos cannot
access the protection of patent law
              Genes
                USA
                  Background: fluctuating judicial treatment of patents on isolated forms of naturally occurring substances
                    Parke-Davis (1911) (adrenalin)
                      “[E]ven if it were merely an extracted product without change, there is no rule that such products are not patentable. Takamine [the inventor] was the first to make it available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, **it became for every practical purpose a new thing commercially and therapeutically**. That was a good ground for a patent.” Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95, 103 (C.C.S.D.N.Y. 1911) (L. Hand)
                      Jon Harkness characterizes the decision as an “under-informed mistake”
                    Funk Bros. (SCOTUS 1948)
                      Facts
                        Inventor discovers that certain strains of bacteria that help some plants remove nitrogen from the air do not interfere with one another
                        Inventor combines the strains into a single inoculant -- and seeks a patent on it
                      Result: Composition is not eligible for protection because inventor did not alter the bacteria
                    lsolated natural genes demed patentable
                      aprx. 20,000 patents in USA on isolated DNA sequences
                  Myriad Genetics
                    Facts
                      Myriad discovers and isolates two genes, mutations in which sharply increase the risk of breast and ovarian cancer
                      Myriad is granted product patents on both the naturally occurring sequences and the corresponding complementary DNS sequences (synthesized from the messenger RNA, which in turn is naturally generated by the DNA sequences)
                    Procedural History
                      SDNY (March 2010): Naturally occurring genes are not patentable
                        they are "directed to a law of nature and therefore improperly granted"
                      Intense debate over policies implicated by the ruling
                        US DOJ, over objections of PTO, supports the ruling
                          although criticizes Judge Sweet's opinion, to the extent it suggested that even manipulated forms of genes are not patentable
                        Steven Salzburg endorsement (Forbes 2010)
                      CAFC (July 2011) reverses SDNY, upholds validity of patents on genes
                      In 2012, SCOTUS vacates and remands for reconsideration in light of _Mayo_
                      CAFC (August 2012) reiterates position in favor of patentability
                    SCOTUS
                      “[A] naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but ... cDNA is patent eligible because it is not naturally occurring.”
                        1. “[G]enes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material.”
                          “Nor are Myriad’s claims saved by the fact that isolating DNA from the human genome severs chemical bonds and thereby creates a nonnaturally occurring molecule. Myriad’s claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA. Instead, the claims understandably focus on the genetic information encoded in the BRCA1 and BRCA2 genes. If the patents depended upon the creation of a unique molecule, then a would-be infringer could arguably avoid at least Myriad’s patent claims on entire genes (such as claims 1 and 2 of the ’282 patent) by isolating a DNA sequence that included both the BRCA1 or BRCA2 gene and one additional nucleotide pair.”
                        2. “cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments. --- [C]reation of a cDNA sequence from mRNA results in an exons-only molecule that is not naturally occurring.”
                Japan
                  Genes, including DNA fragments, whose specific utility is known and disclosed, are patentable
                EPC
                  Biotech Directive (1998)
                    “ An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element.”
                    Highly controversial
                      Principal impetus: keep EU competitive with US and Japan in biotechnology
                      Not fully implemented until 2005
                      Reluctantly adopted by France, Germany, Netherlands
                  Incorporated into EPC law through Implementing Regulations
                    Rule 26(1)
                    EPO Examination Guidelines
                      5.2
                      5.3
                  ECJ (2001): Patenting of human genetic material does not violate principles of human dignity
                  Net effect: An isolated gene is patentable, so long as the applicant specifies its industrial application
                    Technical mistakes caused some of Myriad’s EPC BRCA patents to be narrowed, but the EPO rejected all subject-matter challenges to them
                  Monsanto v. Cetera (ECJ 2010)
                    Facts
                      Monsanto holds EPO patents on roundup-ready soybeans (specifically, on the modified soybean DNA sequence that gives the plant resistance to roundup)
                        patent from EPO
                        but no patent in Argentina
                      Cetera grows roundup-ready soybeans in Argentina, then imports soybean meal into Europe
                      Monsanto alleges violation of Dutch patent, based upon importation of a product that contains an inactive ("dead") version of the patented gene
                      Cetera defends on the ground that Dutch patent law is inconsistent with EU Biotechnology Directive
                    Law
                      Under EU Biotechnology Directive
                        The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material . . . in which the product is incorporated and in which the genetic information is contained and performs its function.
                      But importation of a product containing an inactive form of the patented gene is not infringement
                        national patent laws that suggest it is infringement are invalid
                    Impact
                      considerable uncertainty remains concerning when a gene is inactive
                      reflects growing hostility toward expansive deployments of gene patents
              Software
                1960s: CCPA forces PTO to increase availability of patent protection for software
                  Prater (1969)
                  Bernhart (1969)
                    software for depicting three dimensional objects in two dimensions
                    Held: A machine programmed in a new and nonobvious way is patentable
                  Musgrave (1970)
                1970s: Supreme Court
applies the brakes
                  Gottshalk v. Benson (1972)
                    computerized process for converting binary-coded numerals to pure binary form
                    Held: unpatentable because the invention claimed consists of no more than a mathematical algorithm; a patent would preempt its use
                  Parker v. Flook (1978)
                    computerized method for continuously recalculating the "alarm limit" during a chemical conversion process
                    Held: unpatentable, because if one ignores the algorithm on which the process is based, the claimed invention contains nothing new or inventive
                    Door left open a crack: "We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold."
                1980-2010:
Gradual Relaxation of
impediments
                  CCPA
                    "Freeman-Walker-Abele test"
                      If the claimed invention (a) directly or indirectly recites a mathematical algorithm, but (b) applies that algorithm in an otherwise statutory appparatus or process claim, it's patentable
                    In re Freeman (1977)
                    In re Walter (1980)
                    In re Abele (1982)
                  Supreme Court
                    Diamond v. Diehr
(US 1981)
                      a process for continuously monitoring the temperature inside a synthetic rubber mold, using a computer and the well-known Arrhenius equation for measuring cure time as a function of temperature and other variables
                      Held: patentable, because this is an ordinary industrial process that happens to incorporate a computer program
                  CAFC
                    Iwahashi (1989)
                      voice pattern recognition software
                        incorporating improved technique for calculating autocorrelation coefficients
                        i.e., compaing short snippets of speech
                      held: fact that it was embedded in a read-only device made it a patentable machine or manufacture
                    Arrhythmia (1992)
                      computerized method of analyzing electrocardiograph ("ECG") patterns to detect persons at risk for certain heart diseases
                      "These claimed steps of 'converting,' 'applying,' 'determining,' and "comparing' are physical process steps that transform one physical, electrical signal into another."
                    Allappat (1994)
                      software for controlling the illumination of pixels on an oscilliscope to minimize discontinuity and jaggedness
                      Held: an algorithm embedded in general purpose computer is patentable
                    State Street Bank (1998)
                      computerized hub & spoke accounting method
                      Transformation of data by a machine into a final share price constitutes a practical application of an algorithm and is therefore patentable subject matter
                      Repudiate "business methods" exception to patentability
                    AT&T (1999)
                  PTO
                    1996 Guidelines
                      will accept applications for patents on software on disks
                  Data
                Software_US.pptx
                2014 to present: Supreme Court applies the brakes again
                  Alice (2014)
                    facts
                      The claims at issue relate to a computerized scheme for mitigating “settlement risk”—i.e., the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. In particular, the claims are designed to facilitate the exchange of financial obligations between two parties by using a computer system as a third-party intermediary.
                      The intermediary creates “shadow” credit and debit records (i.e., account ledgers) that mirror the balances in the parties’ real-world accounts at “exchange institutions” (e.g., banks). The intermediary updates the shadow records in real time as transactions are entered, allowing “only those transactions for which the parties’ updated shadow records indicate sufficient resources to satisfy their mutual obligations.”
                      At the end of the day, the intermediary instructs the relevant financial institutions to carry out the “permitted” transactions in accordance with the updated shadow records, thus mitigating the risk that only one party will perform the agreed-upon exchange.
                    Holding
                      [A] framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts:
                        Step 1: First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts.
                        Step 2: If so, we then ask, “[w]hat else is there in the claims before us?” To answer that question, we consider 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.
                          We have described step two of this analysis as a search for an “ ‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”
                    Applied
                      Step 1: “On their face, the claims before us are drawn to the concept of intermediated settlement, *i.e.,* the use of a third party to mitigate settlement risk.
                        Like the risk hedging in *Bilski*, the concept of intermediated settlement is “ ‘a fundamental economic practice long prevalent in our system of commerce.’” ... Thus, intermediated settlement, like hedging, is an“abstract idea” beyond the scope of §101.”
                      Step 2: “We conclude that the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent eligible invention. ...
                        Taking the claim elements separately, the function performed by the computer at each step of the process is “[p]urely conventional.” ... Petitioner’s claims to a computer system and a computer readable medium fail for substantially the same reasons. ... Put another way, the system claims are no different from the method claims in substance. The method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the same idea.”
                  CAFC caselaw since Alice
                    Claims that pass step 1
                      DDR Holdings (2014)
                      Enfish (2016)
                      McRO (2016)
                        patent
                        opinion
                      Visual Memory (2017)
                        patent
                        opinion
                    Claims that fail step 1, but pass step 2
                      Bascom (2016)
                    Claims that fail step 1 and fail step 2
                      Digitech (2014)
                      buySafe (2014)
                      Ultramerical (2014)
                      Content Extraction (2014)
                      OP Technologies (2015)
                      IV v. Capital One (2015)
                      Mortgage Grader (2016)
                      Affinity Labs (2016)
                        patent
                        opinion
                      FairWarning (2016)
                        patent
                        opinion
                      Automation Middleware (2018)
                    Procedure
                      Contested issues of fact with respect to step 2 will prevent summary judgment against patentee
                        Berkheimer (CAFC 2018)
                      But where no such contested issues exist, summary judgment is appropriate
                        BSG Tech (CAFC 2018)
              Business Methods
                Examples of BMPs
                History of Legal Treatment
                  Before 1980: Business Methods were assumed to be outside patent protection
                    Hotel Security (1908)
                    Sterling (1934)
                    Wait (1934)
                    Patton (1942)
                    Loew's Drive-in (1949)
                    Murray (1988)
                  1980-2000: Increased Receptivity to BMPs
                    1980s and 1990s: PTO grants growing number of BMPs
                      many under auspices of loosening rules concerning software patents
                    1996: PTO guidelines instruct examiners to treat BMPs like any other process patent applications
                    State Street Bank (CAFC 1998)
                      facts
                        innovation
                        the patent
                      holding
                        applications for BMPs should be treated like any other process patent applications
                        a process is patent-eligible if it produces “a useful, concrete, and tangible result” — such as the transformation of financial data from one form to another form.
                  1996-2010: Backlash
                    Prior User right (1998)
                      Section 273: Defense to a suit for infringement of a BMP: defendant had in good faith both:
                        (a) reduced the invention to practice more than 1 year before filing date and
                        (b) commercially used the invention prior to filing date
                    Nonobviousness challenges
                      e.g., Amazon "one click"
                    SPER (March 2000)
                      more examiners for Class 705 hired
                      duty to consult more prior-art references
                      each allowed application is reviewed by second examiner
                    eBay (SCOTUS 2006)
                      Justice Kennedy concurrence
                      See the “Remedies” section of this map
                    Comiskey (CAFC 2007)
                      a claim reciting an algorithm or abstract idea can state statutory subject matter only if, as employed in the process, it is embodied in, operates on, transforms, or otherwise involves another class of statutory subject matter, i.e., a machine, manufacture, or composition of matter
                      the present statute does not allow patents to be issued on particular business systems—such as a particular type of arbitration—that depend entirely on the use of mental processes
                    Net Impact
                      BMPs applied for and issued
                      Impact of SPER
                        large increase in prior-art references
                          roughly correlated with increase in patent quality
                            probability that patent will be found valid if challenged
                            i.e., strength in terms of novelty, nonobviousness, and enablement
                          Allison & Hunter 2005
                        Bad news: strategic drafting to avoid SPER
                  Bilski (2010)
                    facts
                      method of trading weather risks
                      claim 1:
                        1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:
                        (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
                        (b) identifying market participants for said commodity having a counter-risk position to said consumers; and
                        (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.
                      no reference to computer
software or apparatus
                    procedural history
                      examiner rejects
                      BPAI affirms
                      CAFC orders en banc review
                        (1) Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under Section 101?
                        (2) What standard should govern in determining whether a process is patent-eligible subject matter under Section 101?
                        (3) Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that constitutes both mental and physical steps create patent-eligible subject matter?
                        (4) Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under Section 101?
                        (5) Whether it is appropriate to reconsider State Street Bank & Trust Co. v Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?
                      oral arguments heard
on May 8, 2008
                        PTO position
                          "process" limited to:
                            process limited to a particular apparatus (i.e., machine implemented)
                            process that operates to change materials to a different state or thing
                      CAFC decision
(en banc October 30, 2008)
                        Majority opinion
                          distance itself from State Street Bank
                          holding: "machine or transformation" test
                            For a claimed process to be patent-eligible under § 101, it is both necessary and sufficient that either:
                              (1) it is tied to a particular machine or apparatus, or
                              (2) it transforms a physical article or object into a different state or thing.
                          ambiguities
                            unclear whether recitation of implementation in a general-purpose computer will suffice
                              PTO takes the position: No
                                Ex parte Langemyr and Ex parte Wasynczuk
                        dissents
                          Mayer
                            would expressly overrule State Street and declare all BMPs unpatentable
                          Rader
                            would adhere to State Street test
                            Bilski patent should be rejected as an "abstract idea"
                          Newman
                            would adhere to State Street test
                            Bilski patent should be granted
                    options presented to SCt
                      (1) Variations on Chakrabarty test
                        (a) reinstate Chakrabarty (1980)
                          patentable
                            anything under the sun made by man
                          unpatentable:
                            laws of nature
                            physical phenomena
                            abstract ideas
                        (b) Chakrabarty + exclusion for tax patents
                        (c) Chakrabarty + for business-method patents
                        (d) Chakrabarty + exclusion of algorithms not tied to physical elements or steps
                          Freeman-Walter-Abele test
                      (2) Variations on "Technical Aspect" Test
                        EU approach
                        cf. IBM amicus brief
                      (3) Variations on "Useful, Tangible, Result" Test
                        (a) reinstate State Street test
                        (b) State Street + requirement of physical steps
                          cf. Microsoft brief
                        (c) State Street + requirement of specific series of steps
                          cf. Yahoo! brief
                      (4) Variations on "machine or transformation" test
                        (a) CAFC decision in Bilski
                        (b) reject option of satisfying "machine" through recitation of general-purpose computer
                    Result
                      reject blanket exclusion of business methods
                      reject "machine or transformation" test as the exclusive test, but approve it as one among many
                      reinstate, roughly, prior open-ended definitions of "process"
                      encourage CAFC to continue to look for ways of limiting BMPs to ensure they advance the purposes of the patent system
                  2010-2014: Continued Controversy and Uncertainty
                    2011 patent reform
                      defendants accused of infringing BMPs in financial services field can initiate post-grant PTO review of the patents
                      this option expires in 2020
                    Cybersource (CAFC 2011)
                    Ultramercial v. Hulu (2011)
                      [Overturned in the wake of Alice: Ultramercial (2014)]
                    Dealertrack (2012)
                    Fort Properties (2012)
                  Now governed by _Alice_ (see Software, above)
              Medical Procedures
                TRIPS 27(3)(A) permits exclusion
                  3. Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals...
                The overwhelming majority of countries exclude medical procedures
                  e.g., EPC 53: no patents
                    European patents shall not be granted in respect of: ... (c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
                USA
                  Statutory limitation on remedies
                    Background
                    US position after 1996: patents permissible but doctors and "related health care entities" are not subject to patent remedies for "performance" of "medical activities"
                      287(c)
                        **(1)** With respect to a medical practitioner’s performance of a medical activity that constitutes an infringement under section 271(a) or (b), the provisions of sections 281, 283, 284, and 285 shall not apply against the medical practitioner or against a related health care entity with respect to such medical activity.
                        **(2)** For the purposes of this subsection:
                          **(A)** the term “medical activity” means **the performance of a medical or surgical procedure on a body**, but shall not include (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) the practice of a patented use of a composition of matter in violation of such patent, or (iii) the practice of a process in violation of a biotechnology patent.
                            [biotechnology patent = "a process of genetically altering of inducing a single or multi-celled organism" *or* "cell fusion procedures yielding a cell line that expresses a specific protein" *or* "methods of using a product produced" by the above processes.]
                          **(B)** the term “medical practitioner” means any natural person who is licensed by a State to provide the medical activity described in subsection (c)(1) or who is acting under the direction of such person in the performance of the medical activity.
                          **(C)** the term “related health care entity” shall mean an entity with which a medical practitioner has a professional affiliation under which the medical practitioner performs the medical activity, including but not limited to a nursing home, hospital, university, medical school, health maintenance organization, group medical practice, or a medical clinic.
                          **(D)** the term “professional affiliation” shall mean staff privileges, medical staff membership, employment or contractual relationship, partnership or ownership interest, academic appointment, or other affiliation under which a medical practitioner provides the medical activity on behalf of, or in association with, the health care entity.
                          **(E)** the term “body” shall mean a human body, organ or cadaver, or a nonhuman animal used in medical research or instruction directly relating to the treatment of humans.
                          **(F)** the term “patented use of a composition of matter” does not include a claim for a method of performing a medical or surgical procedure on a body that recites the use of a composition of matter where the use of that composition of matter does not directly contribute to achievement of the objective of the claimed method.
                          **(G)** the term “State” shall mean any State or territory of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.
                        **(3)** This subsection does not apply to the activities of any person, or employee or agent of such person (regardless of whether such person is a tax exempt organization under section 501(c) of the Internal Revenue Code), who is engaged in the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), where such activities are:
                          **(A)** directly related to the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), and
                          **(B)** regulated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or the Clinical Laboratories Improvement Act.
                        **(4)** This subsection shall not apply to any patent issued based on an application which has an effective filing date before September 30, 1996.
                      Prospective only
                  Judicial hostility toward patents on medical procedures increases
                    Lab. Corp. v. Metabolit (2006)
                    Mayo v. Prometheus (US 2012)
                      facts
                        Patent
                          representative claim
                            "A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
"(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
"(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder, "wherein the level of 6-thioguanine less than about 230 pmol per 8x108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
"wherein the level of 6-thioguanine greater than about 400 pmol per 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject."
                          gist of claims
                            administer a drug for inflammatory bowel disease
                            test for levels of resultant metabolite in the blood
                            administer more or less of the drug, depending on whether metabolite levels fall above or below specified range
                        Is suit barred by 287(c)?
                          Prometheus argued no
                            “ [W]hile “individual doctors generally are immune from suit, ... the commercial entities that enable and induce the infringement (such as Mayo’s for-profit laboratory) are not.” Brief for the Respondent in Opposition (to the petition for writ of certiorari), at 34.
                          AIPPI Amicus argued yes
                            However, 35 U.S.C. § 287(c) makes no distinction between “for- profit,” “not-for-profit,” and any other types of the defined “related health care entities” based upon financial motivation or any other criteria, for that matter; all are immune from suit unless one of the three § 287(c)(2)(A) exceptions applies.
                            Prometheus fails completely to explain why Mayo Clinic Rochester and its related Mayo Collaborative Services are not “related health care entities” within the meaning of 35 U.S.C. § 287(c)(2)(C) and (D), both entitled to be free from patent infringement suits of the instant type. In fact, AIPPI respectfully suggests that both named defendants are plainly “related health care entities” and that, accordingly, Congress has eliminated availability of a federal civil action for patent infringement of Prometheus’ patent against them.
                            The immunity from suit provided by Congress in 35 U.S.C. § 287(c)(1) should be given effect, and the case dismissed for lack of federal subject matter jurisdiction. That this issue apparently was not raised before either the District Court or the Federal Circuit is of no import, as it is hornbook law that “[o]bjections to subject-matter jurisdiction ... may be raised at any time.”
                      CAFC
                        rely on "machine or transformation" test to uphold the patent against 101 challenge
                      Supreme Court
                        reject patent on 101 grounds
                        "If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. "
                        "Purely "conventional or obvious" "[pre]solution activity" is normally not sufficient to transform an unpatentable law of nature into a patent eligible application of such a law. "
                        Policy
                          “[P]atent law [should] not inhibit further discovery by improperly tying up the future use of laws of nature"
                    Ariosa (CAFC)
                  Impact on “personalized medicine”
                    Adjustment of therapies to meet individual patient’s needs, often following diagnostic testing to ascertain individual characteristics
              Tax Strategies
                USA
                  PTO begins to grant them in 1992
                  1992-2011: pressure to eliminate these patents grows
                    Equal Access to Tax Planning Act of 2011
                    introduced in Senate, January 26, 2011
                    accountants favor elimination of tax patents
                      • Limits taxpayers’ ability to use fully tax law interpretations intended by Congress;
                      • May cause some taxpayers to pay more tax than Congress intended or more than others similarly situated;
                      • Complicates the provision of tax advice by professionals;
                      • Hinders compliance by taxpayers;
                      • Misleads taxpayers into believing that a patented strategy is valid under the tax law; and
                      • Precludes tax professionals from challenging the validity of a patented strategy.
                    criticism by tax professors
                      Bernie Wolfman
                  2011: eliminated
                    American Invents Act, Section 14
                      (a) IN GENERAL.--For purposes of evaluating an invention under section 102 or 103 of title 35, United States Code, any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art.
                      (b) DEFINITION.--For purposes of this section, the term “tax liability” refers to any liability for a tax under any Federal, State, or local law, or the law of any foreign jurisdiction, including any statute, rule, regulation, or ordinance that levies, imposes, or assesses such tax liability.
                      (c) EXCLUSIONS.--This section does not apply to that part of an invention that--
                        (1) is a method, apparatus, technology, computer program product, or system, that is used solely for preparing a tax or information return or other tax filing, including one that records, transmits, transfers, or organizes data related to such filing; or
                        (2) is a method, apparatus, technology, computer program product, or system used solely for financial management, to the extent that it is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer or tax advisor.
                      (d) RULE OF CONSTRUCTION.--Nothing in this section shall be construed to imply that other business methods are patentable or that other business method patents are valid.
                      (e) EFFECTIVE DATE; APPLICABILITY.--This section shall take effect on the date of the enactment of this Act and shall apply to any patent application that is pending on, or filed on or after, that date, and to any patent that is issued on or after that date.
                Other countries
                  tax-strategy patents still available in Australia
              Sports Moves
                sports equipment
plainly patentable
                sports techniques patentable but controversial
              Designs
                Requirements
                  Introduction
                  Statute
                    35 USC 171-173
                      171(a): Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title.
                      171(b): The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided.
                  “Article of manufacture”
                    Man-made tangible object
                    Parts of objects are acceptable
                      In re Zahn
                    ephemeral “objects”
are acceptable
                      In re Hruby (fountain)
                  "Design"
                    appearance
                    Must be visible at some point
                      e.g., In re Webb (CAFC 1990) (hip implant, shown in advertisements)
                  “Ornamental"
                    Variety of interpretations
                      Aesthetically pleasing
                      Product of an artistic conception
                      Manifesting grace or symmetry of form
                    Cannot be “primarily functional”
                      LA Gear (CAFC 1988)
                        facts
                        “ LAG correctly asserts that if a patented design is "primarily functional," rather than primarily ornamental, the patent is invalid. ... When function dictates a design, protection would not promote the decorative arts, a purpose of the design patent statute. ... There is no dispute that shoes are functional and that certain features of the shoe designs in issue perform functions. However, a distinction exists between the functionality of an article or features thereof and the functionality of the particular design of such article or features thereof that perform a function. Were that not true, it would not be possible to obtain a design patent on a utilitarian article of manufacture, see, e.g., Pacific Furniture Mfg. Co. v. Preview Furniture Corp., 800 F.2d 1111 (Fed. Cir. 1986) (design patent for chairs), or to obtain both design and utility patents on the same article, see, e.g., Carman Indus., Inc. v. Wahl, 724 F.2d 932, 938-39 (1958).
                        Quoting with approval the ruling of the District Court: “ But every function which [LAG] says is achieved by one of the component aspects of the sole in this case could be and has been achieved by different components. And that is a very persuasive rationale for the holding that the design overall is not primarily functional. Moreover, there is no function which even defendant assigns to the swirl effect around the pivot point, which swirl effect is a very important aspect of the design.”
                      Ethicon (CAFC 2015)
                        Facts
                          “ The patents-in-suit are directed to surgical instruments that use ultrasonic energy created by blades vibrat- ing at high frequencies to cut tissue and blood vessels. These surgical instruments also use the heat generated from the friction of the blade vibrating against the blood vessel to coagulate and seal those blood vessels in order to prevent bleeding.”
                          “ The Design Patents claim particular ornamental designs of an ultrasonic surgical device. The D’801 patent claims a particular ornamental design of an inverted “U”-shaped trigger. The D’802 patent claims the overall appearance of the ornamental design of the “U”-shaped trigger and the particular ornamental design of a rounded and fluted torque knob positioned above and forward from the trigger. The D’803 patent claims the overall appearance of the ornamental design of the “U”-shaped trigger and the particular ornamental design of a rounded activation button positioned directly above the trigger. The D’804 patent claims the overall appearance of the ornamental designs of the “U”-shaped trigger, the fluted torque knob, and the rounded activation button, with the torque knob and the button positioned relative to the trigger as in the D’802 and D’803 patents, respectively.
                        Patents
                          Utility Patents
                            US8182501
                              Representative Claims
                                1. A method for sealing a blood vessel of a patient comprising the steps of:
a) obtaining an ultrasonic surgical shears including an ultrasonic surgical blade, a clamping arm operable to open and close toward the blade, a tissue pad attached to the clamping arm, means for providing a clamp force and means for limiting a user applied clamp force, wherein the blade and tissue pad define a clamping surface area so that the applied clamp force does not exceed a clamping pressure of 210 psi at the clamping surface area;...
                                12. An ultrasonic surgical shears comprising:
a) an ultrasonic surgical blade;
b) a clamping arm operable to open and close toward the blade;
c) a tissue pad attached to the clamping arm;
d) means for exerting a predetermined clamping force on the clamping arm, wherein the blade and tissue pad define a clamping surface area so that the clamp force does not exceed a clamping pressure of 210 psi at the clamping surface area; and
e) means for limiting a user applied clamping force.
                            US5989275
                          Design Patents
                            D661801
                            D661802
                            D661803
                            D661804
                        Holding
                          Articles of manufacture necessarily serve a utilitarian purpose, but design patents are directed to ornamental designs of such articles. 35 U.S.C. § 171. If a particular
design is essential to the use of an article, it cannot be the subject of a design patent. ... We have found designs to be essential to the use of an article when the claimed design is “dictated by” the use or purpose of the article. ... Design patents on such primarily functional rather than ornamental designs are invalid. In determining whether a claimed design is primarily functional, “[t]he function of the article itself must not be confused with ‘functionality’ of the design of the article.”... We have also instructed that the overall appearance of the article—the claimed design viewed in its entirety— is the basis of the relevant inquiry, not the functionality of elements of the claimed design viewed in isolation.
                          We have not mandated applying any particular test for determining whether a claimed design is dictated by its function and therefore impermissibly functional. We have often focused, however, on the availability of alternative designs as an important—if not dispositive—factor in evaluating the legal functionality of a claimed design....
                          The foregoing evidence does not support the district court’s grant of summary judgment that the claimed designs are primarily functional for two reasons.
                            First, the district court’s determination that the designs did not work “equally well” apparently describes the preferences of surgeons for certain basic design concepts, not differences in functionality of the differently designed ultrasonic shears....
                            Further, the district court’s functionality inquiry used too high of a level of abstraction. Instead of focusing on whether the specific patented designs had a functional purpose—the continuously curved “U” shape of the open trigger having tapered handles with ends flaring outwards, the football-shape of the activation button, and the asymmetrically-fluted torque knob with a flat front face— the district court focused its PHG analysis on the functional characteristics that any design of an open trigger, button, and torque knob would have for the underlying ultrasonic shears.
                  “Original”
                    Design cannot have been copied from something else
                    Only the designer can obtain the patent
                  Novel
                    The overall impression of the design must be different from any prior-art reference or device in the eyes of an "ordinary observer"
                    The novelty provisions of 102 apply
                  Nonobvious
                    PHOSITA = designer of ordinary skill of articles of the relevant type
                    Relevant prior art = set of articles of manufacture, not design concepts
                    Secondary factors are relevant provided applicant can establish a nexus
                    Major cases
                      Durling (CAFC 1996)
                        “In the design patent context, the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved .... More specifically, the inquiry is whether one of ordinary skill would have combined teachings of the prior art to create the same overall visual appearance as the claimed design. .... Before one can begin to combine prior art designs, however, one must find a single reference, ‘a something in existence, the design characteristics of which are basically the same as the claimed design.’ .... Once this primary reference is found, other references may be used to modify it to create a design that has the same overall visual appearance as the claimed design. .... These secondary references may only be used to modify the primary reference if they are ‘so related [to the primary reference] that the appearance of certain ornamental features in one would suggest the application of those features to the other.’ .”
                      LA Gear (CAFC 1988)
                        facts
                        “ With respect to a design, obviousness is determined from the vantage of "the designer of ordinary capability who designs articles of the type presented in the application." In re Nalbandian, 661 F.2d at 1216,.... LAG argues that the designs would have been obvious because they are "traditional ones consisting of features old in the art." That some components of Avia's designs exist in prior art references is not determinative. " [I]f the combined teachings suggest only components of the claimed design but not its overall appearance, a rejection under section 103 is inappropriate." .... There is no evidence that the overall appearances of the '420 and '301 designs would have been suggested to ordinary shoe designers by the references.
                        LAG does not contest the commercial success of Avia's shoes manufactured according to the patented designs, but argues the success is attributable to factors other than the designs themselves, such as advertising. Although commercial success is relevant only if a nexus is proven between the success of the patented product and the merits of the claimed invention, ... Avia did present evidence tending to prove nexus and LAG's conclusory statements to the contrary fail to create a genuine factual dispute.
                        In addition, the trial court referred to the accused products as "copies" of the patented designs. ... Copying is additional evidence of nonobviousness. ... LAG's conclusory characterization of the evidence as "speculative" is insufficient to create a genuine factual dispute. On the basis of its evaluation of the four factors outlined above, the court held that the ordinary designer would not have found the '420 or '301 designs, considered as whole designs, obvious in light of the differences between the prior art and the claimed designs. We agree.
                      International Seaway (CAFC 2009)
                        ‘“For design patents, the role of one skilled in the art in the obviousness context lies only in determining whether to combine earlier references to arrive at a single piece of art for comparison with the potential design or to modify a single prior art reference. Once that piece of prior art has been constructed, obviousness, like anticipation, requires application of the ordinary observer test, not the view of one skilled in the art.”
                  Reduced to practice
                    three-dimensional embodiment
                Procedure
                  simple specification: drawing(s), title, single claim
                Term
                  15 years from the date of grant
                Infringement
                  “Ordinary Observer” Test
                    Origin: _Gorham_ (SCOTUS 1871)
                      "[I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other."
                    Courts of Appeals supplement the “ordinary observer” test with “Point of Novelty” Test: The accused device must appropriate the novelty in the patented device which distinguishes it from the prior art
                      schematic illustration
                      e.g., _Litton_ (CAFC 1984)
                        facts
                        Holding
                          “For a design patent to be infringed, however, no matter how similar two items look, "the accused device must appropriate the novelty in the patented device which distinguishes it from the prior art." .... That is, even though the court compares two items through the eyes of the ordinary observer, it must nevertheless, to find infringement, attribute their similarity to the novelty which distinguishes the patented device from the prior art. (This "point of novelty" approach applies only to a determination of infringement....)
                          “The novelty of the '990 patent consists, in light of our analysis in the previous section on the '990 patent's validity, of the combination on a microwave oven's exterior of a three-stripe door frame, a door without a handle, and a latch release lever on the control panel. The district court expressly found, however, that the Whirlpool design had none of these features.”
                    In 2008, CAFC retreats in _Egyptian Goddess_ (en banc)
                      facts
                      Held: apply the ordinary observer test (are the two designs substantially the same to an ordinary observer?) -- with the understanding that the ordinary observer will pay close attention to the prior art
                        "When the differences between the claimed and accused design(s) are viewed in light of the prior art, the attention of the hypothetical ordinary observer will be drawn to those aspects of the claimed design that differ from the prior art. And when the claimed design is close to the prior art designs, small differences between the accused design and the claimed design are likely to be important to the eye of the hypothetical ordinary observer."
                        Suggest 2-stage analysis:
                          “In some instances, the claimed design and the accused design will be sufficiently distinct that it will be clear without more that the patentee has not met its burden of proving the two designs would appear "substantially the same" to the ordinary observer, as required by *Gorham.*
                          “In other instances, when the claimed and accused designs are not plainly dissimilar, resolution of the question whether the ordinary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art.... Where there are many examples of similar prior art designs, ... differences between the claimed and accused designs that might not be noticeable in the abstract can become significant to the hypothetical ordinary observer who is conversant with the prior art.”
                      Applied
                        “It is agreed that the general shape of the accused nail buffer at issue in this case is the same as that of the patented buffer design. The difference between the two is that the accused buffer has raised buffing pads on all four sides, while the patented buffer has buffing pads on only three sides.
                        “The two closest prior art nail buffers before the court were the Falley nail buffer, which has a solid, rectangular cross section with slightly raised buffers on all sides, and the Nailco patent, which shows a nail buffer design having a triangular shape and a hollow cross section, and in which raised buffing pads are located on all three sides
                        “The question before this court under the standard we have set forth above is whether an ordinary observer, familiar with the prior art Falley and Nailco designs, would be deceived into believing the Swisa buffer is the same as the patented buffer....
                        “In light of the similarity of the prior art buffers to the accused buffer, we conclude that no reasonable fact-finder could find that EGI met its burden of showing, by a preponderance of the evidence, that an ordinary observer, taking into account the prior art, would believe the accused design to be the same as the patented design.”
                    Subsequent Applications of the Test
                Remedies
                  35 USC 289
                    Whoever during the term of a **patent for a design**, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any **article of manufacture** for the purpose of sale, or (2) sells or exposes for sale any **article of manufacture** to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his **total profit,** but not less than $250, recoverable in any United States district court having jurisdiction of the parties.
Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.
                  Samsung (SCOTUS 2016)
                    “Article of manufacture” can mean a component of a product -- in which case damages for infringement = “total profit” attributable to that component
                  Double Patenting
                    permissible to secure both a utility patent and a design patent on the same article of manufacture
                      lamp example
                      See _Ethicon_ (above)
                    but only one damages
recovery for infringement
                Data
          EPC
            Statutory basis
              Art. 52
                (1) European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step.
                (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
                  (a) discoveries, scientific theories and mathematical methods;
                  (b) aesthetic creations;
                  (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
                  (d) presentations of information.
                (3) The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.
                (4) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body shall not be regarded as inventions which are susceptible of industrial application within the meaning of paragraph 1.
                  This provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
              Art. 53
                European patents shall not be granted in respect of:
                  (a) inventions the publication or exploitation of which would be contrary to "ordre public" or morality, provided that the exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States;
                  (b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision does not apply to microbiological processes or the products thereof.
                  (c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
              Art. 57
                An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture.
            Software_EU.pptx
          China
            Statutory basis
              Article 5
                Patent rights shall not be granted for invention-creations that violate the law or social ethics, or harm public interests.
                Patent rights shall not be granted for inventions that are accomplished by relying on genetic resources which are obtained or used in violation of the provisions of laws and administrative regulations.
              Article 22
                Inventions and utility models for which patent rights are to be granted shall be ones which are novel, creative and of practical use.
                Novelty means that the invention or utility model concerned is not an existing technology; no patent application is filed by any unit or individual for any identical invention or utility model with the patent administration department under the State Council before the date of application for patent right, and no identical invention or utility model is recorded in the patent application documents or the patent documentations which are published or announced after the date of application.
                Creativity means that, compared with the existing technologies, the invention possesses prominent substantive features and indicates remarkable advancements, and the utility model possesses substantive features and indicates advancements.
                Practical use means that the said invention or utility model can be used for production or be utilized, and may produce positive results.
          Japan
            Statutory basis
              Article 29 (1)
                An inventor of an invention that is industrially applicable may be entitled to obtain a patent for the said invention, except for the following:
                  第二十九条　産業上利用することができる発明をした者は、次に掲げる発明を除き、その発明について特許を受けることができる。
                (i)　inventions that were publicly known in Japan or a foreign country, prior to the filing of the patent application;
                  一　特許出願前に日本国内又は外国において公然知られた発明
                (ii)　inventions that were publicly worked in Japan or a foreign country, prior to the filing of the patent application; or
                  二　特許出願前に日本国内又は外国において公然実施をされた発明
                (iii)　inventions that were described in a distributed publication, or inventions that were made publicly available through an electric telecommunication line in Japan or a foreign country, prior to the filing of the patent application.
                  三　特許出願前に日本国内又は外国において、頒布された刊行物に記載された発明又は電気通信回線を通じて公衆に利用可能となつた発明
              Article 32
                Article 32　Notwithstanding Article 29, any invention that is liable to injure public order, morality or public health shall not be patented.
                  第三十二条　公の秩序、善良の風俗又は公衆の衛生を害するおそれがある発明については、第二十九条の規定にかかわらず、特許を受けることができない。
          Korea
            Statutory basis
              Article 2 (Definitions)
                The definitions of the terms used in this Act are as follows:
                  1. The term "invention" means the highly advanced creation of a technical idea utilizing the laws of nature;
                  2. The term "patented invention" means an invention for which a patent has been granted;
                  3. The term "practice" means any of the following acts:
                    (a) An invention of a product: Manufacturing, using, assigning, leasing, or importing the product or offering to assign or lease the product (including displaying the product for the purpose of assigning or leasing; hereinafter the same shall apply);
                    (b) An invention of a process: Using the process;
                    (c) An invention of a process of manufacturing a product: Using, assigning, leasing, or importing the product manufactured by the process or offering to assign or lease the product, other than the acts specified in item (b).
              Article 29 (Requirements for Patent Registration), Section (1)
                An invention having industrial applicability, other than the following, is patentable:
                1. An invention publicly known or executed in the Republic of Korea or in a foreign country prior to the filing of a patent application;
                2. An invention published in a publication distributed in the Republic of Korea or in a foreign country or an invention disclosed to the public via telecommunications lines prior to the filing of a patent application.
              Article 32 (Unpatentable Inventions)
                Notwithstanding Article 29 (1), no invention that violates public order or sound morals or is likely to harm public health is patentable.
              Article 96 (Limitations on Effects of Patents)
                (1) The effects of a patent shall not extend to the following:
                  1. Execution of a patented invention for the purpose of research or testing (including research and testing for obtaining permission for items of medicines or reporting items of medicines by under the Pharmaceutical Affairs Act or for registering pesticides under the Pesticide Control Act
                  2. Ships, aircraft, vehicles merely passing through the Republic of Korea, or machines, instruments, equipment, or other articles used therein
                  3. Articles existing in the Republic of Korea as at the time the relevant patent application was filed.
                (2) The effects of a patent on the invention of a medicine manufactured by mixing at least two medicines (referring to products used for the diagnosis, relief, treatment, therapy, or prevention of human diseases; hereinafter the same shall apply) or on the invention of a process for manufacturing medicines by mixing at least two medicines shall not extend to the preparation of prescriptions and medicines prepared according to such prescriptions under the Pharmaceutical Affairs Act.
            cf. USA
              “Unlike the United States, isolated genes and other biological materials such as proteins, small molecules and herbal extracts are all patentable in Korea.”
                “it is well established in Korea that genes, cDNAs, vectors and other biological materials isolated from nature are patent eligible regardless of their sources”
                “Human genes are, therefore, patentable.”
                “Although it is in a legally separate issue, proving the utility of claimed genes is often discussed on the same level with the patent eligibility.”
                  “To this issue, the Korean court states that specific, substantial and credible utility is required for genes to be patented.”
                    Patent Court decision 2007 Heo 5116
                “Cells and higher life forms such as plants and animals are also patent eligible”
                  “This is also true for stem cells...stem cells may be patented by defining cells by their origins, expression markers, morphological features, functions and preparation methods”
                    However “stem cells and higher life forms may be affected by [Article 32, which holds that inventions liable to contravene public order and morality cannot be patented] more than any other types of inventions for ethical reasons.”
                  Seed Industry Law (under UPOV convention) may also be used to protect plant varietals
              “Methods of medical treatment for humans cannot be patented in Korea”
                no explicit prohibition on these within Patent Act, but: “courts are clear that these claims cannot be patented primarily because of the concern about the misuse of privately owned patent rights against public health.”
                  “Practically, they are rejected for lacking industrial applicability.”
                  [Until 2019]: diagnostic claims (requiring a human body) could not be be patented either
                    [NEW development]
                      [From March 18, 2019]: "diagnostic technology concerning methods of information processing on computers such as bio-big data processing methods are not classified as medical acts and therefore, are acknowledged as having industrial applicability."
                        “For example, because inventions such as a method of diagnosing a retinal disorder through analysis of retinal scan data by a computer, a method of predicting or diagnosing cancer by analyzing a patient's data through an artificial intelligence algorithm of a computer are not necessarily performed by physicians, such inventions are not classified as medical acts and therefore, are acknowledged as having industrial applicability.“
                [NEW development]
                  [Until 2019]: “In Korea, medical use of a pharmaceutical composition must be claimed as a type of a second medical use claim such as ‘A pharmaceutical composition comprising X for the treatment of Y.’ This also applies when X is a new compound. As the method of treatment claims is not allowable, claiming combination therapy is not easy in Korea although not impossible. Claims need to be cleverly worded as composition claims...”
                  [From March 18, 2019]: due to the recent confluence of IT technologies (including AI) with medical technologies, KIPO has had to revise its Patent Examination Guidelines.
                    [From March 18, 2019]: “already known inventions of pharmaceutical composition for treatment of a disease comprising a pharmaceutically active ingredient are now considered patentable, if such pharmaceutical composition exhibits remarkable therapeutic effect on a certain patient group.”
                      “For example, the invention of a pharmaceutical composition comprising a known pharmaceutical active ingredient exhibiting a remarkable therapeutic effect only in patients with a particular gene is patentable.”
                        “For such inventions, a clear definition of a particular patient population and empirical verification of the remarkability of its therapeutic effect should be described in the specification.”
                yet “method[s] of medical treatment for animals which explicitly exclude humans from the treatment subject can be patented.”
        2. Utility
          General Principles
            Weak version: prevent the patent system from fostering the development of socially pernicious innovations
            Strong version: channel innovation toward areas of greatest social need
          USA
            Foundations
              Constitution, Art I, Section 8, Clause 8
                "The Congress shall have power … to promote the Progress of science and _useful_ arts, by securing for limited times to authors and inventors, the exclusive right to their respective Writings and Discoveries"
              35 USC 101
                “Whoever invents or discovers any new and *useful* process, machine, manufacture, or composition of matter, or any new and *useful* improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
            1. “General Utility” (operable)
              no patents for inventions that violate generally accepted scientific principles
                E.g., perpetual-motion machine
                  Newman v. Quigg, 877 F.2d 1575 (CAFC 2007)
              But invention that works imperfectly or crudely or partially passes muster
                DuPont v. Berkeley, 620 F.2d 1247 (CA8 1980)
              Applicant need not demonstrate subjective knowledge of the reasons why the invention works
            2. “Specific Utility” (practical)
              General Principle: very low threshold
                Amusement is sufficient
                Research tools ordinarily pass muster
                not necessary that the invention be commercially viable or superior to alternatives
                  Bedford v. Hunt (CCDMass 1817) (Justice Story): “degree of utility” is irrelevant
              Problem: When in a research endeavor is a patent appropriate?
                A. Pharmaceuticals
                  Not necessary that a compound have received FDA approval
                    In re Brana (CAFC 1995)
                B. Chemistry
                  Chemical compounds (or processes for producing them) whose function is uncertain
                    Brenner v. Manson (US 1966)
                C. Biochemistry
                  Expressed Sequence Tags
                    2001 Utility guidelines
                    In re Fisher (CAFC 2005)
                      facts
                        “ An EST is a short nucleotide sequence that represents a fragment of a cDNA clone. It is typically generated by isolating a cDNA clone and sequencing a small number of nucleotides located at the end of one of the two cDNA strands. When an EST is introduced into a sample containing a mixture of DNA, the EST may hybridize with a portion of DNA. Such binding shows that the gene corresponding to the EST was being expressed at the time of mRNA extraction.
                        Claim 1 of the ’643 application recites: “A substantially purified nucleic acid molecule that encodes a maize protein or fragment thereof comprising a nucleic acid sequence selected from the group consisting of SEQ ID NO: 1 through SEQ ID NO: 5.”
                      holding
                        “ Turning to the “specific” utility requirement, an application must disclose a use which is not so vague as to be meaningless. Indeed, one of our predecessor courts has observed “that the nebulous expressions ‘biological activity’ or ‘biological properties’ appearing in the specification convey no more explicit indication of the usefulness of the compounds and how to use them than did the equally obscure expression ‘useful for technical and pharmaceutical purposes’ unsuccessfully relied upon by the appellant in In re Diedrich.” In re Kirk, 376 F.2d 936, 941 (C.C.P.A. 1967). Thus, in addition to providing a “substantial” utility, an asserted use must also show that that claimed invention can be used to provide a well-defined and particular benefit to the public.
                        “ Regarding the seven uses asserted by Fisher, we observe that each claimed EST uniquely corresponds to the single gene from which it was transcribed (“underlying gene”). As of the filing date of the ’643 application, Fisher admits that the underlying genes have no known functions.”
            3. “Beneficial Utility” (good for society)
              Old rule: no patents for inventions "injurious to the morals, health, or good order of society"
                Bedford v. Hunt
(CCDMass 1817)
(Justice Story)
                  Examples: “a new invention to poison people, or to promote debauchery, or to facilitate private assassination”
                Rickard v. Du Bon (CA2 1900)
                Scott & Williams v. Aristo Hosiery, 7 F.2d 1003 (CA2 1925)
                  facts
                    patent
                      “1. A seamless stocking having therein at the back of the leg a structural variation of the knit fabric of which it is composed, imitating the narrowing marks occurring in seamed or other narrowed stockings.”
                    purpose
                      Patentee argues: ”Unthinking purchasers still depend upon superficial characteristics of the once superior sort of stocking to indicate to them a desirable article of purchase, without examining the stocking for the other structural features upon which a more intelligent choice might be based. Such persons usually prefer, when they can be induced to make a decision on their respective merits, that type of stocking having no seam at the back, which has manifest advantages as an article of wear. The existence of a large body of prejudice of this sort in the minds of the public unfairly militates against the sale of the circular knit articles of hosiery."
                  holding
                    “This record justifies the claim that the full-fashioned stocking is superior to the seamless stocking. The testimony of the retailers, jobbers, and manufacturers of seamless stockings are all to the effect that they are not the equal of the full-fashioned stocking as a desirable article of wear, because they do not possess the qualities of fit that make it a desirable article that a full-fashioned stocking has been recognized to be. At best, the seamless stocking has imitation marks for **the purpose of deception**, and the idea prevails that with such imitation the article is more salable.”
                    “But such accomplishment does not create a new useful discovery or invention, and **it was not the intention of Congress to grant protection to those who confer no other benefit to the public than an opportunity for making the article more salable**.”
              Modern rule: immorality or deceptiveness not relevant
                Juicy Whip v. Orange Bang (CAFC 1999)
                  “We decline to follow Rickard and Aristo Hosiery, as we do not regard them as representing the correct view of the doctrine of utility under the Patent Act of 1952. The fact that one product can be altered to make it look like another is in itself a specific benefit sufficient to satisfy the statutory requirement of utility.”
          EPC
            EPC 52
              (1) European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and _are susceptible of industrial application._
              (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
                (a) discoveries, scientific theories and mathematical methods;
                (b) aesthetic creations;
                (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
                (d) presentations of information.
              (3) Paragraph 2 shall exclude the patentability of the subject-matter or activities referred to therein only to the extent to which a European patent application or European patent _relates to such subject-matter or activities as such_.
            EPC 53
              European patents shall not be granted in respect of:
              (a) _inventions the commercial exploitation of which would be contrary to "ordre public" or morality_; such exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States;
                EPO Examination Guidelines for interpreting this provision
                  **4.1 Matter contrary to "_ordre public_" or morality**
                    Any invention the commercial exploitation of which would be contrary to "_ordre public_" or morality is specifically excluded from patentability. The purpose of this is to deny protection to inventions likely to induce riot or public disorder, or to lead to criminal or other generally offensive behaviour (see also F-II, 7.2). Anti-personnel mines are an obvious example. Examples in the area of biotechnological inventions as laid down in Rule 28 are listed in G-II, 5.3.
                    This provision is likely to be invoked only in rare and extreme cases. A fair test to apply is to consider whether it is probable that the public in general would regard the invention as so abhorrent that the grant of patent rights would be inconceivable. If it is clear that this is the case, an objection is raised under Art. 53(a); otherwise not. The mere possibility of abuse of an invention is not sufficient to deny patent protection pursuant to Art. 53(a) EPC if the invention can also be exploited in a way which does not and would not infringe "_ordre public_" and morality (see T 866/01). If difficult legal questions arise in this context, then refer to C-VIII, 7.
                    Where it is found that the claims relate in part to such excluded subject-matter, this may have led to the issuing of a partial European or supplementary European search report under Rule 63 (see B-VIII, 1, 3.1 and 3.2). In such cases, in the absence of appropriate amendment and/or convincing arguments provided by the applicant in his response to the invitation under Rule 63(1) (see B-VIII, 3.2) or to the search opinion under Rule 70a (see B-XI, 8), an objection under Rule 63(3) will also arise (see H-II, 5).
                  **4.1.1 Prohibited matter**
                    Exploitation is not to be deemed to be contrary to "_ordre public_" or morality merely because it is prohibited by law or regulation in some or all of the contracting states. One reason for this is that a product could still be manufactured under a European patent for export to states in which its use is not prohibited.
                  **4.1.2 Offensive and non-offensive use**
                    Special attention must be paid to applications in which the invention has both an offensive and a non-offensive use, e.g. a process for breaking open locked safes, the use by a burglar being offensive but the use by a locksmith in the case of emergency non-offensive. In such a case, no objection arises under Art. 53(a). Similarly, if a claimed invention defines a copying machine with features resulting in an improved precision of reproduction and an embodiment of this apparatus could comprise further features (not claimed but apparent to the skilled person) the only purpose of which would be that it also allows reproduction of security strips in banknotes strikingly similar to those in genuine banknotes, the claimed apparatus would cover an embodiment for producing counterfeit money which could be considered to fall under Art. 53(a). There is, however, no reason to consider the copying machine as claimed to be excluded from patentability, since its improved properties could be used for many acceptable purposes (see G 1/98, Reasons 3.3.3). However, if the application contains an explicit reference to a use which is contrary to "_ordre public_" or morality, deletion of this reference is required under the terms of Rule 48(1)(a).
                  **4.1.3 Economic effects**
                    The EPO has not been vested with the task of taking into account the economic effects of the grant of patents in specific areas of technology and of restricting the field of patentable subject-matter accordingly (see G 1/98 Reasons 3.9, and T 1213/05). The standard to apply for an exception under Art. 53(a) is whether the commercial exploitation of the invention is contrary to "_ordre public_" or morality.
                  Biotechnology
                    Under Art. 53(a), in conjunction with Rule 28(1), European patents are not to be granted in respect of biotechnological inventions which concern:
                    (i) Processes for cloning human beings
                      For the purpose of this exception, a process for the cloning of human beings may be defined as any process, including techniques of embryo splitting, designed to create a human being with the same nuclear genetic information as another living or deceased human being (EU Dir. 98/44/EC, rec. 41).
                    (ii) Processes for modifying the germ line genetic identity of human beings
                    (iii) Uses of human embryos for industrial or commercial purposes
                      A claim directed to a product which at the filing date of the application could be **exclusively** obtained by a method which necessarily involved the destruction of human embryos from which the said product is derived is excluded from patentability under Rule 28(1)(c), even if said method is not part of the claim (see G 2/06). The point in time at which such destruction takes place is irrelevant (T 2221/10).
                      When examining subject-matter relating to human embryonic stem cells under Art. 53(a) and Rule 28(1)(c), the following has to be taken into account:
                        (a) the **entire teaching** of the application, not only the claim category and wording, and
                        (b) the **relevant disclosure in the description** in order to establish whether products such as stem cell cultures are obtained exclusively by the use, involving the destruction, of a human embryo or not. For this purpose, the disclosure of the description has to be considered in view of the state of the art at the date of filing.
                      The exclusion of the uses of human embryos for industrial or commercial purposes does not affect inventions for therapeutic or diagnostic purposes which are applied to the human embryo and are useful to it (EU Dir. 98/44/EC, rec. 42).
                    (iv) Processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes
                      The substantial medical benefit referred to above includes any benefit in terms of research, prevention, diagnosis or therapy (EU Dir. 98/44/EC, rec. 45).
                    In addition, the human body, at the various stages of its formation and development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene, cannot constitute patentable inventions (see, however, G-II, 5.2). Such stages in the formation or development of the human body include germ cells (EU Dir. 98/44/EC, rec. 16).
                    Also excluded from patentability under Art. 53(a) are processes to produce chimeras from germ cells or totipotent cells of humans and animals (EU Dir. 98/44/EC, rec. 38).
                    Judgments of the Court of Justice of the European Union on the interpretation of EU Directive 98/44/EC are not binding on the EPO. Still, they may be considered as being persuasive (T 2221/10 and T 1441/13).
              (b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision shall not apply to microbiological processes or the products thereof;
              (c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
                EPO Examination Guidelines
          China
            Article 5
              Patent rights shall not be granted for invention-creations that violate the law or _social ethics, or harm public interests_....
            Article 22
              Inventions and utility models for which patent rights are to be granted shall be ones which are novel, creative and _of practical use_....
              Practical use means that the said invention or utility model _can be used for production or be utilized, and may produce positive results._
          Japan
            Article 29 (1)
              An inventor of an invention that is industrially applicable may be entitled to obtain a patent for the said invention...
                第二十九条　産業上利用することができる発明をした者は、次に掲げる発明を除き、その発明について特許を受けることができる。
            Article 32
              Article 32　Notwithstanding Article 29, any invention that is _liable to injure public order, morality or public health_ shall not be patented.
                第三十二条　公の秩序、善良の風俗又は公衆の衛生を害するおそれがある発明については、第二十九条の規定にかかわらず、特許を受けることができない。
          Korea
            Article 29 (Requirements for Patent Registration), Section (1)
              An invention _having industrial applicability_,... is patentable:
            Article 32 (Unpatentable Inventions)
              Notwithstanding Article 29 (1), no invention that _violates public order or sound morals or is likely to harm public health_ is patentable.
                Article 32 corresponds to the old rules of the US consideration of “Beneficial Utility”.
                  Industrial applicability rule is unique in a way that lists specific industries as exceptions/ineligible to patentable subjects.
                    In general, like in the US, “applicability” can be interpreted into different types of “usefulness”
                      (1) generally operable
                      (2) specific/practical enough
                      (3) good for society
                    Operability and applicability are based on low threshold to meet, as long as the filed patent expects "industrial exploitation in the future", and "*does not include the situations where the industrial usability arises for the first time in the future by advances in the relevant technology.” 2001Hu2801.
              One policy proposal for the increased application of beneficial utility in Korea’s patent system
            cf. also Article 41 (Inventions, etc. Necessary for National Defense)
              (1) The Government may prohibit filing a patent application with a foreign patent office or may order an inventor, applicant, or agent to keep confidential an invention for which a patent application has been filed, if necessary for national defense: _Provided_, That a patent application may be filed in a foreign country with prior permission from the Government therefor.
              (2) The Government may refuse to grant a patent, if an invention for which a patent application has been filed is necessary for national defense and may expropriate the entitlement to a patent for national defense during a war, an incident, or any similar emergency.
              (3) The Government shall pay reasonable compensation for losses incurred due to prohibition against filing a patent application in a foreign country, or classification of a patent application as confidential under paragraph (1).
              (4) The Government shall pay reasonable compensation if it refuses to grant a patent or expropriates the entitlement to a patent under paragraph (2).
              (5) If a person violates an order prohibiting filing a patent application in a foreign country or keeping a patent application confidential under paragraph (1), the person shall be deemed to relinquish his or her entitlement to a patent on the relevant invention.
              (6) If a person violates an order prohibiting filing a patent application in a foreign country or keeping a patent application as confidential under paragraph (1), the person shall be deemed to relinquish his or her entitlement to claim for compensation for losses incurred due to prohibition against filing the patent application in a foreign country, or classification of the patent application as confidential.
              (7) Procedures for prohibiting filing a patent application in a foreign country, or for classifying a patent application as confidential under paragraph (1), procedures for expropriation and the payment of compensation therefor under paragraphs (2) through (4), and other necessary matters shall be prescribed by Presidential Decree.
              cf. Article 106 (Expropriation of Patents) and Article 106-2 (Execution of Patented Inventions by Government, etc.) on conditions allowing patent expropriation by government and subsequent procedures
        3. Disclosure
          General Principles
            Purposes of disclosure requirement
              a. Compell patentee to reveal information that will facilitate further technical progress
                “Quid pro quo” of the patent system
                Accelerate, instead of impede, cumulative innovation
              b. Provide competitors guidance in what they may and may not do
                Application of the fundamental principles of the rule of law
              c. Provide courts guidance in understanding the invention and construing the claims
                cf. evidentiary function of formalities
              d. Prevent patentee from locking up a disproportionate territory
              e. Reinforce priority principles by denying priority dates to persons who have not yet fully achieved the invention
            Critique: assuming these goals are desirable, the present disclosure rules do not advance them effectively
              Benjamin Roin (2005)
                Reasons why disclosure rules don’t work
                  1. Patents are most heavily used for products that can easily be reverse engineered; in those contexts, disclosure in patents is unnecessary
                  2. Patent applicants commonly omit know-how essential to practicing and invention -- and use language designed to claim as much territory as possible and to obscure technological advances
                  3. Threat of enhanced damages awards for willful infringement [see Remedies section] prompt firms to discourage their employees from reading patents
                Data confirm these problems
                  US and European firms rarely report reliance on patents as a source of information concerning technological advances in their fields
                  Japanese firms may rely on patents somewhat more
              Coleen Chien (2016)
                Effective disclosure would require revelation of contextual information:
                  Whether the patent is commercially important
                  Whether the patent is subject to licensing commitments
                  Whether the patent is held for defensive or offensive purposes
                Chemistry and drug patents work better than patents in other fields, because they are effectively searchable, are bound into databases of practice, and are often published long before products are commercially available
          USA
            statutory basis: 35 USC 112
              (a) The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
              (b) The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
            Aspects
              1. Enablement
                The description must be sufficient to enable a PHOSITA to make and use all of the embodiments of the invention claimed in the patent
                  Automotive Technologies (CAFC 2007)
                  E.g., Boston University v. Everlight (CAFC 2018)
                Wands factors
                  Quantity of experimentation necessary
                    That a PHOSITA would need to do some experimentation to practice the invention is OK, so long as it’s not “undue”
                  Amount of guidance provided by the patent
                  Presence in the application of working examples
                    Often helpful, but not essential
                  Nature of the invention
                  State of prior art
                  Skill of PHOSITAs
                  Predictability of the art
                    Mechanical and electrical fields are considered predictable -- and thus enablement requirements are less strict
                    Chemical and biological fields are considered unpredictable -- and thus enablement requirements are stricter
                  Breadth of claims
                disaggregation by technology
                  Lemley & Burk hypothesis
              2. Best Mode
                Old Rules
                  2-step analysis
                    Step 1: (Subjective) Did the *inventor* consider a particular way of implementing the invention superior?
                      Knowledge or intent of *assignee* irrelevant
                        Glaxo v. Novopharm, 52 F.3d 1043 (CAFC 1995)
                    Step 2: (Objective) Did the application adequately enable that particular way?
                      I.e., did it provide sufficient information for a PHOSITA to make and use the best mode without undue experimentation
                    Chemcast v. Arco, 913 F.2d 923 (CAFC 1990)
                  Identifying the best mode
                    Not essential that the best mode be singled out (typically as the "preferred embodiment")
                    but EA Poe strategy may violate the requirement
                  Refinements
                    no need to disclose a preferred manufacturing component or method if the patent does not cover it
                      Eli Lilly (CAFC 2001)
                    no need to disclose an intermediate if it has no effect on properties of final product
                      Bayer (CAFC 2002)
                    Failure of a foreign application to comply with best-mode requirement may prevent invocation of priority date under Paris Convention
                    Temporal Paradox
                  Policies
                    Pro
                      Avoid socially inefficient redundant research
                      Foster competition in the manufacture and sale of patent-dependent products immediately after patent expires
                    Con
                      Adds substantially to cost of patent litigation
                New Rules
                  failure to disclose best mode is no longer a ground for challenging the validity of a patent (35 USC 282(b)(3)(A))
                    Either in litigation
                    Or in post-grant administrative challenges
                  But:
                    can be used by PTO to reject an application
                    And falls within a patent agent’s duty of candor
                    Old Rules remain applicable to proceedings commenced before September 16, 2011
              3. Written Description
                Often invoked when applicant amends application
                  Pertinent provisions
                    Section 120: amended patent application gets priority date of original patent application
                    Section 132: amendment may not introduce new matter into the disclosure
                  Original disclosure must show that the applicant was then "in possession" of the invention eventually claimed
                    Vas-Cath (CAFC 1991)
                    Hyatt (CAFC 1998)
                    Stanford v. University of Hong Kong (CAFC 2017)
                    FWP v. Biogen (CAFC 2018)
                    Courts are more lax when patent is “pioneering”
                Recently applied by CAFC outside of the extension context: applicant must describe the invention itself, not just how to make and use it (enablement)
                  Lilly (1998)
                  Gentry Gallery (1998)
                  Rochester (CAFC en banc 2004)
                  Ariad Pharms v. Lilly, 598 F.3d 1336 (CAFC 2010)(en banc)
                    facts
                      In 1980s, 13 scientists at Harvard, MIT, and Whitehead Institute identified Nuclear Factor Kappa (NF-kB), a protein that affects gene expression
                      On the basis of their discovery of the way the protein worked, they postulated that suppressing NF-kB activity could reduce symptoms of cancer, AIDS, and sepsis
                      They proposed that such suppression could be achieved by (a) specific inhibitors; (b) interfering molecules; and (c) decoy molecules
                      Universities applied for were granted patents on methods using any of substances that will have this suppressing effect
                        one of the patents is licensed to Ariad
                      claims
                        80. [A method for modifying effects of external influences on a eukaryotic cell, which external influences induce NF-κB-mediated intracellular signaling, the method comprising altering NF-κB activity in the cells such that NF-κB-mediated effects of external influences are modified, wherein NF-κB activity in the cell is reduced] wherein reducing NF-κB activity comprises reducing binding of NF-κB to NF-κB recognition sites on genes which are transcriptionally regulated by NF-κB.
                        95. [A method for reducing, in eukaryotic cells, the level of expression of genes which are activated by extracellular influences which induce NF-κB-mediated intracellular signaling, the method comprising reducing NF-κB activity in the cells such that expression of said genes is reduced], carried out on human cells.
                        144. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-κB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells] wherein reducing NF-κB activity comprises reducing binding of NF-κB to NF-κB recognition sites on genes which are transcriptionally regulated by NF-κB.
                        145. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-κB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells], carried out on human cells.
                    holding (9/2)
                      “[A] generic claim may define the boundaries of a vast genus of chemical compounds, and yet the question may still remain whether the specification, including original claim language, demonstrates that the applicant has invented species sufficient to support a claim to a genus. The problem is especially acute with genus claims that use functional language to define the boundaries of a claimed genus. In such a case, the functional claim may simply claim a desired result, and may do so without describing species that achieve that result. But the specification must demonstrate that the applicant has made a generic invention that achieves the claimed result and do so by showing that the applicant has invented species sufficient to support a claim to the functionally-defined genus.”
                      _[A] sufficient description of a genus ... requires the disclosure of either a representative number of species falling within the scope of the genus or structural features common to the members of the genus so that one of skill in the art can “visualize or recognize” the members of the genus.”_
                    applied
                      Patent provided insufficient detail concerning any of the three types of NF-kB suppressing materials
                  AbbVie v. Janssen Biotech, 759 F.3d 1285 (CAFC 2014)
                Resistance to this expansive reading of “written description” has been strong, but so far unavailing
                  e.g., Amgen cert petition (2018)
              4. Definiteness
                The claims must be clear and definite
                  United Carbon (SCOTUS 1942)
                    “The statutory requirement of particularity and distinctness in claims is met only when [the claims] clearly distinguish what is claimed from what went before in the art and clearly circumscribe what is foreclosed from future enterprise.”
                  Datamize (CAFC 2005)
                    A requirement in a claim that a user interface be “aesthetically pleasing” is indefinite
                Factors that affect the application of this requirement
                  When a claim in an issued patent is challenged, courts are more forgiving than during patent prosecution
                    Exxon Research, 265 F.3d 1371 (CAFC 2001)
                  The greater the risk that a claim will encroach on prior art, the more demanding will be the courts
                    Halliburton (CAFC 2008)
                  If information in the specification is sufficient to enable a PHOSITA to resolve the ambiguity, indefiniteness is not fatal
                    Oakley, 316 F.3d 1331 (CAFC 2003)
                  If a claim is ambiguous because it its susceptible of two possible interpretations, court may be willing to save the claim by adopting the narrower of the two interpretations
                    Athletic Alternatives, 73 F.3d 1573 (CAFC 1996)
          EPC
          China
          Japan
          Korea
            Statutory basis: Chapter II, Article 42 (Patent Applications)
              Most relevant section for statutory basis is Chapter 2, Article 42: [2.42.(2)]: "A patent application filed under paragraph (1) shall be accompanied by a specification containing the description of the invention and the claims, necessary drawings, and an abstract."
              Yet many other sections (especially in Chapters I and II) detail specifics related to application requirements:
                amendments
                  Article 47 (Amendments to Patent Applications)
                  Article 51 (Rejection of Amendments)
                procedural details
                  Article 46 (Procedural Amendments)
                validity of an abstract in the process
                  Article 43 (Abstract)
                electronic/paper formats for submission
                joint filings, filings by foreigners, etc.
            Aspects
              Enablement, written description, and definiteness are intended for disclosure. Generally the same as the US, except the best mode approach
        4. Novelty
          USA
            Old Rules
              Govern applications filed or patents granted before March 16, 2013
              First to invent
                35 USC 102(g)
                  A person shall be entitled to a patent unless... (g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or
                    applies only to interference proceedings
                      each party claims the same invention
                    Geographic coverage
                      In US prior to 12/8/93
                      In US or NAFTA member country prior to 1/1/96
                      In US, NAFTA member country or any WTO member country after 1/1/96
                  (2) before such person's invention thereof, the invention was <u>made in this country</u> by another inventor who had not abandoned, suppressed, or concealed it.
                    applies even outside of interference proceedings
                    limitations
                      applies only to inventions "in this country"
                      applies only to "inventions" -- i.e., requires reduction to practice
                  In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.
                The patent is awarded to the first person to invent a particular invention
                  Interference Scenarios
                Presumptive Date of Invention = date of reduction to practice
                  (1) Actual
                    Physical embodiment +
                      RTP of a gene is isolating it (Amgen (1991))
                    Complete embodiment +
                      Equivalents don't count
                    Testing sufficient to demonstrate utility and success
                      Unless their efficacy is obvious (Manville (1990))
                  (2) Constructive
                    Patent application
                      including provisional applications
                      Date of the US application governs, not date of prior foreign application
                  Need corroborating evidence
                    "rule of reason" test for sufficiency
                      Brown (CAFC 2002)
                Backdating
                  Conception
                    Formulation of the complete means of solving a problem sufficiently detailed that a PHOSITA could RTP without further research
                      (Mahurkar (1996)
                      Conception of gene requires envisioining its "detailed chemical structure"
                        Amgen (1991)
                        Fiers (1993)
                    Idea must encompass all parts of the invention
                    Question of law, not fact
                    Need corroborating evidence
                      "rule of reason" test for sufficiency
                        Brown (CAFC 2002)
                  Diligence
                    Actual activity or legitimate excuse during entire critical period
                    For constructive RTP, applicant charged with diligence or laziness of his attorney
                    Need corroborating evidence
                Forfeiting the benefit of a reduction to practice
                  Abandonment, Concealment or Suppression
                    type 1: actively hide your invention from then public
                      commercialization of the output of the invention, while concealing the invention = bad
                        "non-informing public use"
                      commercialization of an object embodying the invention, which is impossible to reverse engineer = OK
                        "hidden public use"
                    type 2: substantial delay in filing for a patent
                      Peeler (CCPA 1976)
                      legitimate excuse for delay: working on refining the invention, and refinements are reflected in ultimate patent application
                    change of heart
                      concealment, followed by renewed efforts to obtain a patent: applicant can claim priority date of renewal of effort
                        Paulik (CAFC 1985)
                      renewed activity in response to appearance of a competitor does not count
                  Derivation
                    35 USC 102(f)
                      a person shall be entitled to a patent unless he did not himself invent the subject matter sought to patented
                    X did not invent the "invention" if:
                      (1) Y conceived of it first, and
                      (2) the conception was communicated to X in a fashion that would enable a PHOSITA to practice it
                        i.e., the disclosure by Y must have met standard enablement requirements and must have encompassed all elements of the invention
                        Agawam (1869)
                    Location of the derivation irrelevant
                    Need corroborating evidence
                Joint Invention
                  35 USC 116
                    "When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type of amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent."
                  Requirements
                    Each contributes significantly (measured by quality) to conception or RTP of at least one of the claims, in a fashion other than the explanation of familiar principles
                  Effects
                    Each acquired an undivided ownership interest in the entire patent
                    Each may unilaterally license others to practice the invention -- without an accounting
                      35 USC 262
                        In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.
              Fatal conditions --if they occur prior to the invention by the applicant
                "Known or used by others" in USA
                  35 USC 102(a)
                    a person shall be entitled to a patent unless -- (a) the invention was known or used by others in this country ..., before the invention thereof by the applicant for patent
                  Known
                    = idea sufficiently well developed that a PHOSITA could reduce it to practice
                    What if subsequently forgotten?
                      Gayler (SCOTUS 1850) suggests that forgotten prior art can't anticipate, but current validity is in doubt
                  Used
                    = reduced to practice
                      Abandoned (and never perfected) experiments don't anticipate
                  "By others"
                    = reasonably accessible to the public
                      National Tractor Pullers (ND Ill. 1980) MD 394
                        drawings on the underside of a kitchen tablecloth, never published, later destroyed don't suffice
                      Rosaire (1955)
                        Non secret use of oil prospecting method is sufficient
                      Woodland Trust (CAFC 1998)
                        “Section 102(a) establishes that a person can not patent what was already known to others. If the invention was known to or used by others in this country before the date of the patentee's invention, the later inventor has not contributed to the store of knowledge, and has no entitlement to a patent.”
                        “Accordingly, in order to invalidate a patent based on prior knowledge or use, that knowledge or use must have been available to the public.”
                          See Carella v. Starlight Archery, 804 F.2d 135, 139, 231 U.S.P.Q. 644, 646 (Fed. Cir. 1986) (the § 102(a) language "known or used by others in this country" means knowledge or use which is accessible to the public);
                          35 U.S.C. § 102(a) reviser's note (1952) (noting that " 'known' has been held to mean 'publicly known' " and that "no change in the language is made at this time");
                          P.J. Federico, Commentary on the New Patent Act (1954) reprinted in 75 J. PAT. TRADEMARK OFF. SOC'Y Y 161, 178 (1993) ("interpretation [of § 102(a) ] by the courts excludes various kinds of private knowledge not known to the public"; these "narrowing interpretations are not changed").
                          See also Coffin v. Ogden, 85 U.S. (18 Wall.) 120, 124-25, 21 L. Ed. 821 (1873) (accessible hence anticipating prior use); Gayler v. Wilder, 51 U.S. (10 How.) 477, 497-98, 13 L. Ed. 504 (1850) (nonaccessible hence nonanticipating prior use).
                Patented or Described in a Printed Publication anywhere in the world (a)
                  35 USC 102(a)
                    A person shall be entitled to a patent unless -- (a) the invention was ... patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent
                  "printed" includes information available in digital form
                  publication (or patent) must have been accessible to the public
                    "public" = members of the public interested in the art, exercising reasonable diligence
                    examples of documents deemed publicly accessible
                      typed or mimeographed document deposited in public library
                      scientific paper submitted for refereeing to a journal
                      properly indexed microfilm in Library of Congress
                      catalogued dissertation in university library
                        Hall (1986)
                      instruction sheet distributed on one island in Japan
                      German design patent available for public viewing in Germany
                        Carlson (1992)
                    examples of documents deemed not publicly accessible
                      private papers
                      memos internal to an organization
                      scientific paper delivered orally to an audience
                      improperly indexed microfilm in Library of Congress
                      dissertation deposited in library but not catalogued or shelved
                        Bayer
                      undergraduate thesis deposited and shelved in college library, but catalogued only by author's name
                        Cronyn (1989)
                      documents filed in USSR, inaccessible to Americans
                      grant application sent to outside reviewers
                Described in Prior US Patent Applications by Others
                  102(e)
                    A person shall be entitled to a patent unless ... (e) the invention was described in (1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international applicant filed under the treaty defined in Section 351(a) shall have the effects for the purposes of this sub section of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language
                  applies only to descriptions of the invention in prior patent applications by others, not claims in prior patent applications by others
                  International Novelty Problem
                Strict Anticipation Rules apply to these scenarios
                  Each element of the claimed invention is disclosed in a single prior-art reference or embodied in a single prior-art device or practice
                    That which would literally infringe, if later, anticipates, if earlier
                      No anticipation by equivalents
                    "Inherency" gloss on "disclosed"
                      In re Robertson (1999) MD 361
                      Sprouts Litigation (CAFC 2002) MD 384
                        broccosprouts.com
                      Schering (CAFC 2003) MD 374
                      SmithKline (CAFC 2005)
                  Inadvertent prior art
does not count
                    Mitchell v. Tilghman (US 1873)
                    Edison Light (CA3 1909)
                    In re Seaborg (CCPA 1964)
                  Enablement
                    Description of the invention must be enabling, taking into account the level of ordinary skill in the pertinent art
                      Paulsen (CAFC 1994)
                      enablement applies to <u>making</u> the invention, not <u>using</u> the invention
                        contrast 35 USC 112
                        Hafner (CCPA 1969) MD 381
                    But a device or practice embodying the invention need not be enabling
                      Lockwood (CAFC 1997) MD 385
                  Disclosure of a species anticipates a genus, but not vice versa
              Fatal conditions -- if they occur more than 1 year before filing a patent application
                "On Sale" in USA
                  102(b) A person shall be entitled to a patent unless ...(b) the invention was ... on sale in this country more than one year prior to the date of the application for patent in the United States
                  Requires “definite sale or offer to sell"
                    Of What?
                      Of embodiment of the invention
                      Not of patent rights
                      Not necessary that the sale reveal the technology to the public
                    Not necessary that the sale or offer be public
                      Confidential commercial sales still qualify
                    What constitutes a sale or offer to sell is determined with reference to the law of contracts
                      Test: would it have been regarded as a sale or an offer “within the commercial community”
                      Medicines Co. (CAFC 2016)
                  For the bar to apply, the technology that is offered for sale must be sufficiently well developed as to be “ready for patenting” on the critical date
                    Pfaff, 525 U.S. 55 (SCOTUS 1998)
                    “Ready for patenting” can be shown either “by proof of reduction to practice before the critical date; or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention.”
                  Gaps between the challenged claims and the thing sold
                    to create a bar, the thing on sale must be:
                      The invention itself, or
                      Something that makes the invention (as claimed) obvious
                        Smith (CAFC 1983)
                        Tec Air (CAFC 1999)
                    Claim-by-claim analysis
                  public sales of fruits of concealed process?
                    Metallizing Engineering (CA2 1946): will bar patenting of the process
                    Exception for sales <u>by a third party</u> of fruits of a secret process
                      W.L. Gore (CAFC 1983)
                  Narrow "experimental
use" exception
                    Applicable only when the sale was "merely incidental to the primary purpose of experimentation"
                      Scaltec (CAFC 1999);
                      Aqua Marine (CAFC 2001)
                    compare Atlanta Attachment (CAFC 2008)
                  Geographic scope
                    One of the following must have happened in the US
                      Sale
                      Offer to sell
                      Substantial activity prefatory to a sale
                "In public use" in USA
                  102(b)
                    A person shall be entitled to a patent unless ... (b) the invention was in public use ... in this country ..., more than one year prior to the date of the application for patent in the United States
                  "public"
                    How many embodiments of the invention?
                      Egbert (SCOTUS 1881): 1 is sufficient
                    How many people?
                      Egbert: 1 is sufficient
                    Visibility to the public at large?
                      Egbert: Not necessary
                      Hall (SCOTUS 1883)
                        Conical bolts in a safe
                        “The invention was complete in those safes. It was capable of producing the results sought to be accomplished, though not as thoroughly as with the use of welded steel and iron plates. The construction and arrangement and purpose and mode of operation and use of the bolts in the safes were necessarily known to the workmen who put them in. They were, it is true, hidden from view after the safes were completed, and it required a destruction of the safe to bring them into view. But this was no concealment of them or use of them in secret. They had no more concealment than was inseparable from any legitimate use of them.
                        Also no experimental-use defense
                          As to the use's being experimental, it is not shown that any attempt was made to see if the plates of the safes could be stripped off, and thus to prove whether or not the conical bolts were efficient. The safes were sold, and apparently no experiment and no experimental use were thought to be necessary. The idea of a use for experiment was an afterthought. An invention of the kind might be in use and no burglarious attempt be ever made to enter the safe, and it might be said that the use of the invention was always experimental until the burglarious attempt should be made, and so the use would never be other than experimental. But it is apparent that there was no experimental use in this case, either intended or actual. The foregoing views, which are controlling to show that claim 3 of the patent in suit cannot be sustained, are in accordance with those announced by this Court in Egbert v. Lippmann
                      How open must the venue be to the public at large?
                        Beachcombers (CAFC 1994); kaleidescope at a party = public
                        Baxter (CAFC 1996): centrifuge in a laboratory = public
                        New Railhead (CAFC 2002) (2/1): commercial use of a drill bit (and a method of using it) <u>under</u> public land is sufficiently public
                  Exceptions
                    Confidentiality
                      Express or tacit agreements by persons permitted to use the invention not to make it public prevents operation of the bar
                    Experimental Use
                      City of Elizabeth (1878)
                      Lough (CAFC 1996)
                        Facts
                        “ To determine whether a use is "experimental," a question of law, the totality of the circumstances must be considered, including various objective indicia of experimentation surrounding the use, such as the number of prototypes and duration of testing, whether records or progress reports were made concerning the testing, the existence of a secrecy agreement between the patentee and the party performing the testing, whether the patentee received compensation for the use of the invention, and the extent of control the inventor maintained over the testing.... The last factor of control is critically important, because, if the inventor has no control over the alleged experiments, he is not experimenting. If he does not inquire about the testing or receive reports concerning the results, similarly, he is not experimenting.
                        “ In order to justify a determination that legally sufficient experimentation has occurred, there must be present certain minimal indicia. The framework might be quite formal, as may be expected when large corporations conduct experiments, governed by contracts and explicit written obligations. When individual inventors or small business units are involved, however, less formal and seemingly casual experiments can be expected. Such less formal experiments may be deemed legally sufficient to avoid the public use bar, but only if they demonstrate the presence of the same basic elements that are required to validate any experimental program. ...The question framed on this appeal is whether Lough's alleged experiments lacked enough of these required indicia so that his efforts cannot, as a matter of law, be recognized as experimental.
                  Identity?
                    Suppose I try out an invention in public, then add a minor feature that improves it, file patent application for the improved version. As of what date am I barred?
                    To create a bar, the thing in public use must be:
                      The Invention itself, or
                      Something that makes the invention (as claimed) obvious, or
                      Drawings sufficient to be enabling
                "Patented or Described in a
Printed Publication anywhere in the world (b)
                  102(b)
                    A person shall be entitled to a patent unless ... (b) the invention was patented or described in a printed publication in this or a foreign country..., more than one year prior to the date of the application for patent in the United States
                  "patent"
                    Same definition as in context of novelty (102(a))
                  "publication"
                    Same definition as in the context of novelty (102(a))
                    Examples
                      Klopfenstein (CAFC 2004)
                        Poster displayed for 3 days at a conference for cereal chemists = printed publication
                          “The factors relevant to the facts of this case are: the length of time the display was exhibited, the expertise of the target audience, the existence (or lack thereof) of reasonable expectations that the material displayed would not be copied, and the simplicity or ease with which the material displayed could have been copied.”
                      SRI International (CAFC 2008)
                        Posting a paper on one’s own FTP servers and providing the address to the chair of conference panel is not printed publication
                      Medtronic (CAFC 2018)
                        Remand for reconsideration of a borderline case in light of the following factors:
                        “These decisions illustrate some common considerations about materials that are distributed at meetings or conferences. As relevant to this case, the size and nature of the meetings and whether they are open to people interested in the subject matter of the material disclosed are important considerations. Another factor is whether there is an expectation of confidentiality between the distributor and the recipients of the materials. Even if there is no formal, legal obligation of confidentiality, it still may be relevant to determine whether any policies or practices associated with a particular group meeting would give rise to an expectation that disclosures would remain confidential.”
                Foreign Patents by
the Applicant
                  102(d)
                    A person shall be entitled to a patent unless ...(d) the invention was first patented or caused to be patented, or was the subject of an inventor's certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor's certificate filed more than twelve months before the filing of the application in the United States
                  Effective Date of Foreign Patent Grant
                    Kathawala
                  Identity
                    Kathawala issue
                    Obviousness issue
            New Rules
              Govern applications filed on or after March 16, 2013
              First inventor to file
                Patent Awarded to the first inventor to file
                  new 35 USC 102(a)(2)
                    A person shall be entitled to a patent unless ... the claimed invention was described in a patent issued [to another] … or in [another’s] application for patent published … [that] was effectively filed before the effective filing date of the claimed invention.
                Forfeiting the benefit of first to file
                  filer derived the invention from someone else
                  filer abandons or suppresses the application
              Fatal conditions --if they occur prior to the **filing** by the applicant
                Invention was on sale anywhere in the world
                  new 35 USC 102(a)
                    A person shall be entitled to a patent unless -- (a) the invention was ... on sale before the effective filing date of the claimed invention
                  incorporate old rules about "on sale," but now applied throughout the world
                  Secret sales or offers to sell <u>may</u> still qualify
                    Helsinn (SCOTUS, forthcoming 2019) will address the issue
                Invention was in public use anywhere in the world
                  new 35 USC 102(a)
                    A person shall be entitled to a patent unless -- (a) the invention was ... in public use before the effective filing date of the claimed invention
                  Legislative history suggests intent to narrow the interpretation of “public”
                    Fewer activities qualify than used to; movement of the boundary of the hazardous zone upward
                  Is a secret noninforming use by the applicant a public use?
                    Merges and Duffy contend yes; this rule survives
                Invention was available to the public anywhere in the world
                  new 35 USC 102(a)
                    A person shall be entitled to a patent unless -- (a) the invention was ... otherwise available to the public before the effective filing date of the claimed invention
                  similar to old "known or used by others" (in USA)
                Invention was Patented or Described in a Printed Publication anywhere in the world
                  new 35 USC 102(a)
                    A person shall be entitled to a patent unless -- (a) the invention was ... the claimed invention was patented, [or] described in a printed publication, ... before the effective filing date of the claimed invention
                  publication (or patent) must have been accessible to the public
                    "public" = members of the public interested in the art, exercising reasonable diligence
                    old cases defining boundary between public and nonpublic are still relevant
                  "printed" includes information available in digital form
                  Strict Anticipation Rules
                    (see above)
                Invention was described in an issued US patent or in a US patent application filed before applicant's filing date
                  102(a)(2): A person shall be entitled to a patent unless— ... the claimed invention was described in a patent issued [to another] … or **in [another’s] application for patent … [that] was effectively filed before the effective filing date of the claimed invention.**
                  This implements the new (qualified) “first-to-file” principle
              Grace Period
                102(b) now creates a set of 1-year exceptions to the prior art that will invalidate a patent under 102(a)
                Prior Art does not include disclosures made less than 1 year before filing date by the inventor or derived (directly or indirectly) from disclosures made by the inventor
                  35 USC 102(b)(1)(A)
                    “ A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if— (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor...”
                  effect: no penalty for disclosing your invention prior to filing
                  “Derivation” determined in a “derivation” proceeding
                  New provision will probably be construed broadly, to shield inventors from adverse effects of any of their own actions during grace period
                    e.g., sales (either secret or open)
                Prior Art does not include disclosures made less than 1 year before filing date by 3rd parties <u>after</u> a "public" disclosure by the inventor
                  35 USC 102(b)(1)(B)
                    “ A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if— (B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
                  effect: strong incentive to disclose your invention <u>publicly</u> early
                    The set of disclosures by an inventor that will immunize the inventor against adverse effects of subsequent prior art by 3rd parties may be narrower than the set of disclosures that an inventor is permitted to make (during the grace period) without forfeiting his/her own patent protection
                Prior Art does not include disclosures made less than 1 year before filing date by 3rd parties in patents or patent applications if:
                  3rd party derived the information from inventor, or
                  3rd party filed after public disclosure by inventor, or
                  common assignee for the two patent applications
                    Purpose of this provision is to facilitate more joint research ventures
                  35 USC 102(b)(2)
                    (2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS.—A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if—
(A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;
(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.
                Net effects
                  If P wants patent protection only in the US, new regime will create strong incentives to *disclose* as early as possible
                    prevent rivals from patenting
                    disable rivals from interfering with P's patenting ability through early disclosure
                    grace period ensures no penalty for disclosing before patenting
                  If P wants global protection, *file* as soon as possible
                    disclosing prior to filing will be fatal in many countries, which lack grace periods
          EPC
          China
          Japan
          Korea
            First inventor to file
              Patent awarded to the first inventor to file
                Article 36
                  "Where at least two patent applications are filed for an identical invention on different dates, only the applicant who filed first is entitled to a patent on the invention."
                  If two parties file on same date, only the party agreed upon by all parties may obtain patent; if no agreement, no patent. Above two rules apply to filings of patent application and application for utility model registration. Other conditions detailed in Art. 36 (5) and (6).
            Grace Period
              Article 30
                [post March 15, 2012]: 12 months from "relevant date" in the following cases:
                  1. When a person entitled to a patent has caused his/her invention to fall under any subparagraph of Article 29 (1)" (except for "where the relevant application has been laid open, or the patent has been registered and published, in the Republic of Korea or in any foreign country under a treaty or an Act");
                    Grace period not automatic
                      Requires submission of written statement and evidentiary document
                        Written statement (at time of filing date) = declaration of of intent to apply grace period
                        Evidentiary document (within 30 days of filing date) = must show the following
                          (i) disclosure date
                          (ii) disclosing party
                          (iii) type of disclosure
                          (iv) content of disclosure
                        [post July 29, 2015]: extensions to window in which grace period may be applied allowed in the following cases:
                          upon submission of an amendment
                            (i) at any time prior to issuance of first office action (Notice of Preliminary Rejection, Notice of Allowance)
                            (ii) within time period for responding to a preliminary rejection
                            (iii) when filing request for reexamination
                          within three months of receipt of Notice of Allowance, but before registration
                      must accompany a direct patent application, either in Korea or internationally
                        filing internationally does not extend the grace period
                    elibility
                      eligible disclosures include:
                        public use
                        presentation at academic conference
                        printed publication
                      ineligible disclosures include:
                        laid-open publication (in/outside Korea)
                        registration publication (in/outside Korea)
                    disclosure and the meaning of “an invention publicly known or worked”
                      Supreme Court decision 2011Hu4011 (decided April 26, 2012)
                        reasoned that a person having ordinary skill in the art may be able to disassemble and analyze a product covered by the invention to understand the invention
                          thus “invention publicly known or worked” = that disclosed under the condition that a person who does not have confidentiality obligations can readily grasp the content of the invention, whether or not that person recognizes the invention
                      Patent Court decision 2016Heo7954 (decided on January 11, 2016, upheld by Supreme Court)
                        [in re a chemical substance or medicine]: even if a product was publicly sold before the filing date, if a person skilled in the art was unable to determine its compositional ratio or components without undue effort, then it cannot be considered that the person could have recognized the invention in the product
                  2. When the invention falls under any subparagraph of Article 29 (1) contrary to the will of the person entitled to a patent."
Detailed rules and procedures follow in Art. 30 (2) and (3).
                    if a third party discloses the invention in any form before the filing date, it serves as prior art
                      examples of scenarios from precedent cases determined to constitute disclosure against will of applicant:
                        an invention disclosed to the public intentionally of negligently by a licensee or agent
                        third party has invention disclosed to public as a result of threat, fraud, industrial espionage, or violation of confidentiality
        5. Inventive Step
          Policies
            Welfare Theory
              a. We should not incur unnecessary social costs by extending monopoly protection to inventions that would have emerged (soon) even in the absence of the carrot of a patent
                Roberts v. Sears (CA7 1983)(Posner, J.)
                “ [T]he costs as well as benefits of patent protection are relevant to deciding which inventions should be patentable. The balance tips against protection when the invention is the sort that was likely to be made, and as soon, even if no one could have patented it. In such a case patent protection would have no good incentive effects but would have the usual bad monopoly effects.
                All this is well recognized in the law. The Supreme Court in the _Graham_ case, referring to Thomas Jefferson's views on patent policy, said it was "the underlying policy of the patent system that 'the things which are worth to the public the embarrassment of an exclusive patent,' as Jefferson put it, must outweigh the restrictive effect of the limited patent monopoly. The inherent problem was to develop some means of weeding out those inventions which would not be disclosed or devised but for the inducement of a patent."
                The means chosen was the concept codified in the statutory term "obvious." The term identifies the cases in which patent protection is not necessary to induce invention and would therefore visit the costs of monopoly on the consuming public with no offsetting gains.
                  As Professor Kitch has explained, "the basic principle on which the non-obviousness test is based [is that] a patent should not be granted for an innovation unless the innovation would have been unlikely to have been developed absent the prospect of a patent . . . . The non-obviousness test makes an effort, necessarily an awkward one, to sort out those innovations that would not be developed absent a patent system." Kitch, Graham v. John Deere Co.: New Standards for Patents, 1966 Sup. Ct. Rev. 293, 301.
                  Now it is true that if the invention, though the sort of thing that ordinarily would be expected to take much time and toil to make, was made in a flash of genius, this does not make it "obvious." That is the force of the last sentence of section 103 ("Patentability shall not be negatived by the manner in which the invention was made"), as explained in the Reviser's Note. Much time and toil may have been spent in getting to the point where the spark of genius could be struck, and in any event people should not be encouraged to do drudge work by making it a condition of obtaining patent protection. But if a court thinks an invention for which a patent is being sought would have been made as soon or almost as soon as it was made even if there were no patent laws, then it must pronounce the invention obvious and the patent invalid.
              b. The non-obviousness requirement helps offset distortions caused by risk aversion
                Robert Merges, “Uncertainty and the Standard of Patentability” (1992), pp. 43-51
                Patent doctrine tempered by non obviousness requirement increases the expected value of risky R&D investments more than the expected value of safe R&D investments
                That, in turn, will mitigate the socially inefficient tendency of R&D managers to select safe investments instead of risky ones, even when the expected values of the former is less than that of the latter
                Illustration
            Fairness Theory
              a. Only especially creative labor merits the reward of intellectual property
                Lawrence Becker, “Deserving to Own Intellectual Property” (1993)
                  A ... version of the desert-for-labor argument has to do with the way in which the laborer can come to have special needs that can appropriately be met by the award of property rights. Suppose we argue as follows:
                  (a) Laborers sometimes become dependent on their products in a way connected to their identity as persons, so that the welfare
of the product is related directly to their (psychological) integrity or welfare as persons. Let us call this relation identity-dependence.
                  (b) Identity-dependence on the products of one's labor constitutes having a basic personal need for the welfare of those products.
                  (c) If a basic personal need is generated and sustained by social norms, and if one's meeting that personal need requires the help of additional social norms, then either i) the help should be given, or ii) the need-sustaining norms should be changed.
                  (d) Identity-dependence on the products of one's intellectual labor is generated and sustained by social norms that identify human excellence with authorship, originality, and singularity, and which encourage the author-identification of products.
                  (e) Ownership norms sometimes help meet the basic personal needs of identity-dependence on the products of one's intellectual labor.
              b. Locke’s “sufficiency” proviso forbids grants of (intellectual) property to things that would soon be invented by others
                Robert Nozick, _Anarchy, State, and Utopia_
                  Extending patent protection to an invention that would have emerged (soon) leaves both other inventors and consumers worse off than if not such property rights were available
                  Problem could be avoided if “independent invention” were a defense (as it is in copyright law)
                    “An inventor's patent does not deprive others of an object which would not exist if not for the inventor. Yet patents would have this effect on others who independently invent the object. Therefore, these independent inventors, upon whom the burden of proving independent discovery may rest, should not be excluded from utilizing their own invention as they wish (including selling it to others). Furthermore, a known inventor drastically lessens the chances of actual independent invention. For persons who know of an invention usually will not try to reinvent it, and the notion of independent discovery here would be murky at best. Yet we may assume that in the absence of knowledge of the invention, for independent discovery.”
          History
            United States
              Early 19th century
                Novelty rules established through adjudication
                  Evans v. Eaton (SCOTUS 1818)
                    Independent creation is insufficient; novelty is necessary
                  Pennock v. Dialogue (SCOTUS 1829)
                    lopng-standing public use of an invention by a third party will bar patenting
                Before 1850, no nonobviousness requirement
              Hotchkiss (SCOTUS 1850): no patents for creations that are “destitute of ingenuity or invention”
                To be patentable, an invention must require “more ingenuity and skill” than that held by “an ordinary mechanic acquainted with the business”
                Doorknob made of clay or porcelain (rather than wood or metal) deemed to fail this requirement
              1850-1950: Vague and Shifting Doctrine
                Cuno Corp. (SCOTUS 1941): need “flash of creative genius”
              1952: Congress adds section 103
              1952-1966: Confusion re impact of 103
              Graham (SCt 1966)
                “Under §103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.”
              1966-1982: Circuit courts diverge
                2nd Circuit upholds only 4.8% of challenged patents
                8th Circuit: 6%
                1st, 3rd, 6th, 7th, 9th, 10th Circuits: around 19%
                4th and 5th Circuits: around 40%
              1982-2007: Federal Circuit relaxes the standard
                increased reliance on secondary factors
                TSM test
                  challenger must identify some teaching, suggestion, or motivation to combine prior-art references
                  E.g., Al-site Corp. (CAFC 1999)
              1973-2004: Changing scope of prior art
                courts gradually expand scope of 103 prior art to match 102
                partially offsetting series of statutes, excluding prior art developed by patentee or affiliates
              KSR (SCt 2007)
                reject "rigid application" of TSM test
                  “ We begin by rejecting the rigid approach of the Court of Appeals. Throughout this Court’s engagement with the question of obviousness, our cases have set forth an expansive and flexible approach inconsistent with the way the Court of Appeals applied its TSM test here....”
                  “ Helpful insights, however, need not become rigid and mandatory formulas; and when it is so applied, the TSMtest is incompatible with our precedents. The obviousness analysis cannot be confined by a formalistic conception ofthe words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles and the explicit content of issued patents.”
                Suggest revival of “obvious to try” as one way of establishing obviousness
                  “ The same constricted analysis led the Court of Appeals to conclude, in error, that a patent claim cannot be proved obvious merely by showing that the combination of elements was “obvious to try.” ... When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under §103.”
                Express skepticism concerning non-obviousness of combination patents
                  “The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results. “
                  “ When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, §103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.”
                increase somewhat the creativity attributed to a PHOSITA
                  “The second error of the Court of Appeals lay in its assumption that a person of ordinary skill attempting to solve a problem will be led only to those elements of prior art designed to solve the same problem. ... Common sense teaches, however, that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit theteachings of multiple patents together like pieces of a puzzle.”
                Don’t overstate the hazard of hindsight bias
                  “ A factfinder should be aware, of course, of the distortion caused by hindsight bias and must be cautious of arguments reliant upon *ex post* reasoning. ... Rigid preventative rules that deny factfinders recourse to common sense, however, are neither necessary under our case law nor consistent with it.”
              AIA
                Relevant date for assessing obviousness is date of filing, not date of invention
                Simplify mechanism for identifying relevant prior art
                  Incorporate by reference definition of prior art under 102
                  Limited (as before) by requirement that the art be “analogous”
              Empirical studies of the Impact of the Changing Standard
                John R. Allison & Mark A. Lemley, Empirical Evidence on the Validity of Litigated Patents, 26 AIPLA Q.J. 185 (1998)
                Sean M. McEldowney, New Insights on the “Death” of Obviousness: An Empirical Study of District Court Obviousness Opinions, 2006 Stanford Technology Law Review 4
                Lee Petherbridge & R. Polk Wagner, The Federal Circuit and Patentability: An Empirical Assessment of the Law of Obviousness, 85 Texas Law Review 2051 (2007)
                Christopher A. Cotropia, Nonobviousness and the Federal Circuit: An Empirical Analysis of Recent Case Law, 82 Notre Dame Law Review 911 (2007)
                Ali Mojibi, An Empirical Study of the Effect of KSR v. Teleflex on the Federal Circuit’s Patent
Validity Jurisprudence, 20 Albany Law Journal of Science and Technology 559 (2010)
                Jason Rantanen, The Federal Circuit’s New Obviousness Jurisprudence: An Empirical Study, 16 Stanford Technology Law Review 709 (2013)
                Gregory Mandel, “ A Nonobvious Comparison: Nonobviousness Decisions at the PTAB and in the Federal Courts” 24 Texas Intellectual Property Law Review (2017)
            Other jurisdictions
            Fintech_Inventive_Step.pptx
          USA
            statutory basis:
35 USC 103
              Old Rules
                (a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.
                (b) [Biotechnological Processes]
                  (1) Notwithstanding subsection (a), and upon
timely election by the applicant for patent to
proceed under this subsection, a biotechnological process using or resulting in a composition of matter that is novel under section 102 and nonobvious under subsection (a) of this section shall be considered nonobvious if--
                    (A) claims to the process and the composition
of matter are contained in either the same
application for patent or in separate applications having the same effective filing date; and
                    (B) the composition of matter, and the process
at the time it was invented, were owned by the
same person or subject to an obligation of
assignment to the same person.
                  (2) A patent issued on a process under paragraph (1)--
                    (A) shall also contain the claims to the
composition of matter used in or made
by that process, or
                    (B) shall, if such composition of matter is
claimed in another patent, be set to expire
on the same date as such other patent,
notwithstanding section 154 [35 USCS § 154].
                  (3) For purposes of paragraph (1), the
term "biotechnological process" means--
                    (A) a process of genetically altering or
otherwise inducing a single- or
multi-celled organism to--
                      (i) express an exogenous nucleotide sequence,
                      (ii) inhibit, eliminate, augment, or alter expression of an endogenous nucleotide sequence, or
                      (iii) express a specific physiological characteristic not naturally associated with said organism;
                    (B) cell fusion procedures yielding a
cell line that expresses a specific protein,
such as a monoclonal antibody; and
                    (C) a method of using a product produced
by a process defined by subparagraph
(A) or (B), or a combination of
subparagraphs (A) and (B).
                (c) ["Bass disqualifier"]
                  (1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.
                  (2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if--
                    (A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;
                    (B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and
                    (C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.
                  (3) For purposes of paragraph (2), the term
"joint research agreement" means a written
contract, grant, or cooperative agreement
entered into by two or more persons or entities
for the performance of experimental,
developmental, or research work in the field
of the claimed invention.
              New Rules
                A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
            Consider three variables:
              (a) scope and content of the prior art
                "prior art" now includes all types of prior art under 102
                  including secret prior art under 102(e)
                provided that the prior art in question is "analogous"
                  ie., either within the same field of endeavor as the invention
                  or reasonably pertinent to the same problem as that addressed by the invention
                Exclusions of prior art developed by patentee or affiliates
                  "Bass disqualifier"
                  AIPA (1999)
                  CREATE Act of 2004
              (b) gap between prior art and claims
              (c) level of skill in the art
                Factors include:
                  Education level of typical worker in the field
                  Education level of the inventor(s)
                    Daiichi (CAFC 2007)
                  Kinds of problems typically encountered in the field
                  Pace on innovation in the field
                  Sophistication and difficulty of the technology in the field
              “Against this background the obviousness or nonobviousness of the subject matter is determined.”
                Test: Would the invention, as claimed, have been obvious to a PHOSITA
            “Secondary factors”
              commercial success
                must show "nexus" between the invention and the commercial success of the product (or process) embodying it
                Novartis (CAFC 2017) in addition requires demonstration of nexus between _the aspect of the invention that reflects an inventive step_ and commercial success
              long-felt need
              failure of others
              unexpected results
              Skepticism of experts prior to invention
              Industry praise after invention
              copying by others
              public recognition of patentee as the inventor
                e.g., through licensing
              simultaneous invention by others
                currently given very little weight
              Illustration: World Bottling Cap (PTAB 2017)
            Ancillary Tests
              TSM requirement rejected in KSR
                But such motivating circumstances are still relevant
              "obvious to try" test
                At the time of the invention, would it have been obvious to a PHOSITA to try the particularly combination of elements that eventually produced the invention? If so, the invention is obvious.
                rejected by CAFC in In re Deuel (1995)
                Revived by KSR (SCOTUS 2007)
                Current scope of the test varies by CAFC panels
                  Leo Pharma 2013
                  Sanofi 2014
                  Hoffmann 2014
              prior art "taught away"
            Standard of Review
              Nonobviousness is a question of law
                Determinations are thus subject to _de novo_ review
              but depends on factual findings, which are reviewed under different standards:
                if by PTO, "substantial evidence" test
                if by District Court judge, "clearly erroneous" standard
                if by jury, "substantial evidence" test
            Illustration
              Kraft v. Kellogg (2017)
                Patent
                Decision
          EPC
          China
          Japan
          Korea
            statutory basis: Article 29
              Article 29 (Requirements for Patentability)
                (1) An invention having industrial applicability, other than the following, is patentable:
                  1. An invention publicly known or practiced in the Republic of Korea or in a foreign country prior to the filing of a patent application;
                  2. An invention published in a publication distributed in the Republic of Korea or in a foreign country or an invention made available to the public via telecommunications lines prior to the filing of a patent application.
                (2) Notwithstanding paragraph (1), an invention that can be made easily by a person with ordinary skill in the art to which the invention pertains, from the invention referred in any subparagraph of paragraph (1), prior to the filing of a patent application, shall not be patentable.
            Guidelines
              Patent Examination Guidelines
                Part III (Requirements for Patentability)
                  Chapter 2. “Novelty”
                  Chapter 3. “Inventive Step”
                Part IV (Amendment of Specification, Claims, or Drawing[s])
                Part V (Examination Procedure)
                  Chapter 2. “Search for Prior Art”
                  Chapter 3. “Examination Process”
                Part IX (Examination Criteria by Technology)
            Illustration
              Korea’s inventive step in comparison (C-J-K)
              Illustrative cases
                On how to read prior art in making an inventive step determination
                  Supreme Court decision 2013 Hu 2873 + 2880 (consolidated)
                    clarified that prior art must be considered as a whole:
                      “...to determine the inventiveness of an invention, the prior art should be considered in its entirety...not just from the portion of prior art...”
                      “...when a different prior art is presented which is contradictory to the (portion of) prior art, then this prior art reference must also be considered...when determining the inventive step.”
                Case where the inventive step of the parameter or numerically limited range of the subject invention is denied by the combination of Prior Arts
                  Patent Court decision 2017 Heo 3720 (decided January 25, 2019)
                    “ If the parameters are expressed by changing only the expression of the properties of characteristics of a publicly known product by a prior invention, the parameter invention must be regarded as being essentially the same or similar to the prior invention, thereby lacking the novelty and inventive step. On the other hand, the inventive step may not be denied if the parameter as a technical means for solving a different problem from publicly known inventions has significance, and the descriptions that there is a causal relationship between the parameter and the peculiar effect such as heterogeneous effect is described in the specification in detail, or a person having ordinary skill in the art (a “skilled person”) is able to infer the above significance as a technical means and the causal relationship from the description of the specification. Even if the above technical significance cannot be recognized with the introduction of the parameter itself, if the parameter invention can also be a numerical limitation invention and significant difference occurs between in and out of a limited numerical range, the inventive step should not be denied. ”
                On (1) the elements required to deny the novelty of selective invention; (2) the elements to recognize that the detailed description of selective invention states conspicuous differences in effect compared to the preceding invention so that the inventive step of selective invention is not denied
                  Supreme Court decision 2008 Hu 736 + 743 (decided October 15, 2009) [Revocation of Registration (Patent)]
                On the criteria to determine an inventive step in the case of a patented invention which uses specific numerical values to express the scope of elements for a publicly known invention
                  Supreme Court decision 2008 Hu 4998 (decided August 19, 2010) [Invalidity of Registration (Patent)]
                On the inventive step in a case where an invention can easily be invented by a person of ordinary skill in the art based on the compared invention(s) and widely-known and commonly-used technology
                  Patent Court decision 2013 Heo 5803 (decided January 10, 2014) [Refusal of Registration (Patent)]
                On the process by which inventive step is determined
                  Patent Court decision 2008 Heo 8792 (in Korean)
      Impediments to patent protection for Fintech
        Subject Matter
          Software
            U.S.
              Background: Software_US.pptx
              1960s: CCPA forces PTO to increase availability of patent protection for software
                Prater (1969)
                Bernhart (1969)
                  software for depicting three dimensional objects in two dimensions
                  Held: A machine programmed in a new and nonobvious way is patentable
                Musgrave (1970)
              1970s: Supreme Court
applies the brakes
                Gottshalk v. Benson (1972)
                  computerized process for converting binary-coded numerals to pure binary form
                  Held: unpatentable because the invention claimed consists of no more than a mathematical algorithm; a patent would preempt its use
                Parker v. Flook (1978)
                  computerized method for continuously recalculating the "alarm limit" during a chemical conversion process
                  Held: unpatentable, because if one ignores the algorithm on which the process is based, the claimed invention contains nothing new or inventive
                  Door left open a crack: "We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold."
              1980-2010:
Gradual Relaxation of
impediments
                CCPA
                  "Freeman-Walker-Abele test"
                    If the claimed invention (a) directly or indirectly recites a mathematical algorithm, but (b) applies that algorithm in an otherwise statutory appparatus or process claim, it's patentable
                  In re Freeman (1977)
                  In re Walter (1980)
                  In re Abele (1982)
                Supreme Court
                  Diamond v. Diehr
(US 1981)
                    a process for continuously monitoring the temperature inside a synthetic rubber mold, using a computer and the well-known Arrhenius equation for measuring cure time as a function of temperature and other variables
                    Held: patentable, because this is an ordinary industrial process that happens to incorporate a computer program
                CAFC
                  Iwahashi (1989)
                    voice pattern recognition software
                      incorporating improved technique for calculating autocorrelation coefficients
                      i.e., compaing short snippets of speech
                    held: fact that it was embedded in a read-only device made it a patentable machine or manufacture
                  Arrhythmia (1992)
                    computerized method of analyzing electrocardiograph ("ECG") patterns to detect persons at risk for certain heart diseases
                    "These claimed steps of 'converting,' 'applying,' 'determining,' and "comparing' are physical process steps that transform one physical, electrical signal into another."
                  Allappat (1994)
                    software for controlling the illumination of pixels on an oscilliscope to minimize discontinuity and jaggedness
                    Held: an algorithm embedded in general purpose computer is patentable
                  State Street Bank (1998)
                    computerized hub & spoke accounting method
                    Transformation of data by a machine into a final share price constitutes a practical application of an algorithm and is therefore patentable subject matter
                    Repudiate "business methods" exception to patentability
                  AT&T (1999)
                PTO
                  1996 Guidelines
                    will accept applications for patents on software on disks
                Data
              2014 to present: Supreme Court applies the brakes again
                Alice (2014)
                  facts
                    The claims at issue relate to a computerized scheme for mitigating “settlement risk”—i.e., the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. In particular, the claims are designed to facilitate the exchange of financial obligations between two parties by using a computer system as a third-party intermediary.
                    The intermediary creates “shadow” credit and debit records (i.e., account ledgers) that mirror the balances in the parties’ real-world accounts at “exchange institutions” (e.g., banks). The intermediary updates the shadow records in real time as transactions are entered, allowing “only those transactions for which the parties’ updated shadow records indicate sufficient resources to satisfy their mutual obligations.”
                    At the end of the day, the intermediary instructs the relevant financial institutions to carry out the “permitted” transactions in accordance with the updated shadow records, thus mitigating the risk that only one party will perform the agreed-upon exchange.
                  Holding
                    [A] framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts:
                      Step 1: First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts.
                      Step 2: If so, we then ask, “[w]hat else is there in the claims before us?” To answer that question, we consider 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.
                        We have described step two of this analysis as a search for an “ ‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”
                  Applied
                    Step 1: “On their face, the claims before us are drawn to the concept of intermediated settlement, *i.e.,* the use of a third party to mitigate settlement risk.
                      Like the risk hedging in *Bilski*, the concept of intermediated settlement is “ ‘a fundamental economic practice long prevalent in our system of commerce.’” ... Thus, intermediated settlement, like hedging, is an“abstract idea” beyond the scope of §101.”
                    Step 2: “We conclude that the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent eligible invention. ...
                      Taking the claim elements separately, the function performed by the computer at each step of the process is “[p]urely conventional.” ... Petitioner’s claims to a computer system and a computer readable medium fail for substantially the same reasons. ... Put another way, the system claims are no different from the method claims in substance. The method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the same idea.”
                CAFC caselaw since Alice
                  Claims that pass step 1
                    DDR Holdings (2014)
                    Enfish (2016)
                    McRO (2016)
                      patent
                      opinion
                    Visual Memory (2017)
                      patent
                      opinion
                  Claims that fail step 1, but pass step 2
                    Bascom (2016)
                  Claims that fail step 1 and fail step 2
                    Digitech (2014)
                    buySafe (2014)
                    Ultramerical (2014)
                    Content Extraction (2014)
                    OP Technologies (2015)
                    IV v. Capital One (2015)
                    Mortgage Grader (2016)
                    Affinity Labs (2016)
                      patent
                      opinion
                    FairWarning (2016)
                      patent
                      opinion
                    Automation Middleware (2018)
                  Procedure
                    Contested issues of fact with respect to step 2 will prevent summary judgment against patentee
                      Berkheimer (CAFC 2018)
                    But where no such contested issues exist, summary judgment is appropriate
                      BSG Tech (CAFC 2018)
            EPC
              Software_Europe.pptx
          Business Methods
            USA
              Examples of BMPs
              History of Legal Treatment
                Before 1980: Business Methods were assumed to be outside patent protection
                  Hotel Security (1908)
                  Sterling (1934)
                  Wait (1934)
                  Patton (1942)
                  Loew's Drive-in (1949)
                  Murray (1988)
                1980-2000: Increased Receptivity to BMPs
                  1980s and 1990s: PTO grants growing number of BMPs
                    many under auspices of loosening rules concerning software patents
                  1996: PTO guidelines instruct examiners to treat BMPs like any other process patent applications
                  State Street Bank (CAFC 1998)
                    facts
                      innovation
                      the patent
                    holding
                      applications for BMPs should be treated like any other process patent applications
                      a process is patent-eligible if it produces “a useful, concrete, and tangible result” — such as the transformation of financial data from one form to another form.
                1996-2010: Backlash
                  Prior User right (1998)
                    Section 273: Defense to a suit for infringement of a BMP: defendant had in good faith both:
                      (a) reduced the invention to practice more than 1 year before filing date and
                      (b) commercially used the invention prior to filing date
                  Nonobviousness challenges
                    e.g., Amazon "one click"
                  SPER (March 2000)
                    more examiners for Class 705 hired
                    duty to consult more prior-art references
                    each allowed application is reviewed by second examiner
                  eBay (SCOTUS 2006)
                    Justice Kennedy concurrence
                  Comiskey (CAFC 2007)
                    a claim reciting an algorithm or abstract idea can state statutory subject matter only if, as employed in the process, it is embodied in, operates on, transforms, or otherwise involves another class of statutory subject matter, i.e., a machine, manufacture, or composition of matter
                    the present statute does not allow patents to be issued on particular business systems—such as a particular type of arbitration—that depend entirely on the use of mental processes
                  Net Impact
                    BMPs applied for and issued
                    Impact of SPER
                      large increase in prior-art references
                        roughly correlated with increase in patent quality
                          probability that patent will be found valid if challenged
                          i.e., strength in terms of novelty, nonobviousness, and enablement
                        Allison & Hunter 2005
                      Strategic drafting to avoid SPER
                Bilski (2010)
                  facts
                    method of trading weather risks
                    claim 1:
                      1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:
                      (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
                      (b) identifying market participants for said commodity having a counter-risk position to said consumers; and
                      (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.
                    no reference to computer
software or apparatus
                  procedural history
                    examiner rejects
                    BPAI affirms
                    CAFC orders en banc review
                      (1) Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under Section 101?
                      (2) What standard should govern in determining whether a process is patent-eligible subject matter under Section 101?
                      (3) Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that constitutes both mental and physical steps create patent-eligible subject matter?
                      (4) Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under Section 101?
                      (5) Whether it is appropriate to reconsider State Street Bank & Trust Co. v Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?
                    oral arguments heard
on May 8, 2008
                      PTO position
                        "process" limited to:
                          process limited to a particular apparatus (i.e., machine implemented)
                          process that operates to change materials to a different state or thing
                    CAFC decision
(en banc October 30, 2008)
                      Majority opinion
                        distance itself from State Street Bank
                        holding: "machine or transformation" test
                          For a claimed process to be patent-eligible under § 101, it is both necessary and sufficient that either:
                            (1) it is tied to a particular machine or apparatus, or
                            (2) it transforms a physical article or object into a different state or thing.
                        ambiguities
                          unclear whether recitation of implementation in a general-purpose computer will suffice
                            PTO takes the position: No
                              Ex parte Langemyr and Ex parte Wasynczuk
                      dissents
                        Mayer
                          would expressly overrule State Street and declare all BMPs unpatentable
                        Rader
                          would adhere to State Street test
                          Bilski patent should be rejected as an "abstract idea"
                        Newman
                          would adhere to State Street test
                          Bilski patent should be granted
                  options presented to SCt
                    (1) Variations on Chakrabarty test
                      (a) reinstate Chakrabarty (1980)
                        patentable
                          anything under the sun made by man
                        unpatentable:
                          laws of nature
                          physical phenomena
                          abstract ideas
                      (b) Chakrabarty + exclusion for tax patents
                      (c) Chakrabarty + for business-method patents
                      (d) Chakrabarty + exclusion of algorithms not tied to physical elements or steps
                        Freeman-Walter-Abele test
                    (2) Variations on "Technical Aspect" Test
                      EU approach
                      cf. IBM amicus brief
                    (3) Variations on "Useful, Tangible, Result" Test
                      (a) reinstate State Street test
                      (b) State Street + requirement of physical steps
                        cf. Microsoft brief
                      (c) State Street + requirement of specific series of steps
                        cf. Yahoo! brief
                    (4) Variations on "machine or transformation" test
                      (a) CAFC decision in Bilski
                      (b) reject option of satisfying "machine" through recitation of general-purpose computer
                  Result
                    reject blanket exclusion of business methods
                    reject "machine or transformation" test as the exclusive test, but approve it as one among many
                    reinstate, roughly, prior open-ended definitions of "process"
                    encourage CAFC to continue to look for ways of limiting BMPs to ensure they advance the purposes of the patent system
                2010-2014: Continued Controversy and Uncertainty
                  2011 patent reform
                    defendants accused of infringing BMPs in financial services field can initiate post-grant PTO review of the patents
                    this option expires in 2020
                  Cybersource (CAFC 2011)
                  Ultramercial v. Hulu (2011)
                    [Overturned in the wake of Alice: Ultramercial (2014)]
                  Dealertrack (2012)
                  Fort Properties (2012)
                Now governed by _Alice_ (see Software, above)
            EPC
              Express exclusion of BMPs
              Software_Europe.pptx
            China
              Until 2017, China was strongly hostile to BMPs
              SIPO, Revised Guidelines for Patent Examination, Section 4.2, Chapter 1, Part II (2017): “For claims involving business models, if they contain both the content of business rules and methods and technical characteristics, the possibility of obtaining patent rights shall not be excluded under Article 25 of the Patent Law”.
            Japan
              JPO is also retreating from strong hostility to BMPs
              Lerner et al.: “Rejection rate for
BMPs, of which finance constitutes a considerable number, fell from 92% in 2000 to 34% in 2012 through 2014 (Japanese Patent Office, 2019).”
        Procedure
          Fintech_IPRs
        Extraterritoriality
          “ For a claimed method, an infringing use requires _all_ recited steps to be performed in the U.S. However, for a claimed system, an infringing use is the place where “control” of the system is exercised and its “benefits” are obtained, which may be in the U.S. even if some of the claimed components are located outside of the U.S.“
        Effect: fintech innovators continue to pursue patents aggressively, but with limited success
          Fintech_Patents.pptx
      Bottom line: patent protection for fintech innovations is now difficult to obtain, but highly valuable to innovators
    Copyright
      Software
        Activities Software Owners Seek to Control
          Consumer reproduction of object code
          Commercial reproduction of object code
          Incorporation of parts of source code in new programs [a.k.a. "follow-on copying"]
            modestly improved versions of original program
              see, e.g., Unix history
            substantially different programs that incorporate parts of original
              e.g., SCO litigation
          "Nonliteral copying"
            Production and distribution of programs that have the same "structure, sequence, or organization," even though they have none of the original source or object code
        Copyright protection for software available in all WTO countries
        Scope of Protection
          Copying Nonliteral features
            Altai test
          Menu hierarchies
            Lous v. Paperback (DMass 1990)
            Lotus v. Borland (CA1 1995)
          Application Programming Interfaces
            Oracle v. Google (CAFC 2014)
              Oracle_2021.pptx
            Oracle v. Google (SCOTUS 2021)
          Reverse Engineering for Interoperability
            U.S. Cases finding copying for this purpose to be fair use
              CAFC (Atari 1992 [dictum]; Bowers 2003 [dictum])
              CA5 (DSC Communications 1996)
              CA 9 (Sega 1992; Sony 2000)
              CA11 (Bateman 1996)
            EC Directive 91/250, Art. 6
      Bottom line: copyright protection for fintech innovations is now easy to obtain, but not valuable to innovators
        The underlying structure of most fintech applications is built using open source software
          Fintech_Open_Source.pptx
        Protection against verbatim reproduction of object code (by either consumers or competitors) does little good
          The code provides access to a service, not an entertainment experience; consumer “piracy” is thus not a threat
          Competitors have little incentive to copy consumer interfaces, etc., which can easily be invented around
        Shields against similarity of “structure, sequence, or organization” are weak
        Protection against replication of APIs is now very limited -- and would be a minimal value anyway
          Shielding APIs is inconsistent with business models in fintech, which depend on interoperability
    Trademark
      Requirements
        I. What May be Protected?
          Distinctiveness Hierarchy
            Arbitrary/Fanciful
              arbitrary = existing word applied arbitrarily to a product or service
              fanciful = newly created word, image, etc.
            Suggestive
              suggest a quality of the good or service
              examples
                Citibank
                Q-tips
            Descriptive
              Describes an ingredient, quality, or characteristic of the product
              factors used to determine
whether a mark is descriptive or suggestive
                Dictionary definition of the term
                Does it require consumers to use
their imaginations to reach a conclusion
as to the nature of the goods?
                Do competitors “need” the term to
describe their products – or would
it be “useful” to them?
                To what extent has the term
been used by competitors?
              protectable only with secondary meaning
              examples
                Fish Fri -- for frying batter
                Coca-Cola
                Alo -- for aloe cream
                Vision Center -- for optical services
                Tender Vittles -- for cat food
                Arthriticare -- for arthritis treatment
                Investacorp -- for investment services
                Custom-Blended -- for gasoline blended at the pump
            Generic
              the term is commonly used to denote the goods or services at issue
              unprotectable
              examples
                Bermuda -- for shorts
                Safari — for hats and jackets
                Kleenex
                Thermos
                Duck Tours
          Secondary Meaning
            consumers have come to recognize the mark as a source indicator
              a.k.a "acquired distinctiveness"
              the primary significance of the mark in consumers' minds is not the product, but the producer
              not essential that consumers know who the producer is
              define "consumers"
                most cases treat the the public in general as the relevant group
                but some acknowledge that the relevant group consist of buyers of the type of product or service at issue
                  Harlequin Enterprises (CA2 1981)
                    readers of romance novels
                  Louboutin (CA2 2012)
            for purposes of federal registration
              LA 2(e) bars registration of "merely descriptive marks"
              LA 2(f) permits registration of such marks with SM
            proving secondary meaning
              direct evidence
                *consumer surveys
                consumer testimony
                retailers/dealers testimony
              circumstantial evidence
                exclusivity, duration, and manner of use
                sales volume
                amount and manner of advertising
                unsolicited press coverage
                proof of intentional copying
                  in CA4, gives rise to a rebuttable presumption of SM
                  includes intentional "knockoffs" by 3rd parties, not just defendant
                    Louboutin (CA2 2012)
            "secondary meaning in the making"
          Permissible Forms
            Words
              e.g., Nike
              includes numbers
                e.g., 501 jeans
              words in other languages subject to the "doctrine of foreign equivalents"
                if the other language is common in the United States, the English translation will be employed in categorizing the mark
            Symbols
              e.g., Nike swoosh
            Slogans
            Names
              Personal Names
                surnames, first names, and combinations
                must be used in commerce as source indicator
                Common Law
                  Majority rule: can be protected only upon a showing of SM
                    Policy basis
                      1. protection of a name without SM may prevent other persons with same name from using it
                      2. May also deprive public of useful information: identity of provider
                      3. consumers aware that some names are common will not be confused if two different persons with the same name both use it in their businesses
                  Minority: if the policies underlying the traditional rule are not implicated, a name can be inherently distinctive
                    Peaceable Planet (CA7 2004)
                Lanham Act
                  while surnames are registrable only with SM, two-part personal names are registrable without SM
                  examples of registered personal names
                    Billy Joel
                    Johnny Carson
                    Madonna
                    The artist formerly known as Prince
                    DKNY
                    Dan Marino’s American Sports Bar & Grill
                    O.J. Simpson/ O.J./ Team O.J. Justice for All
              Names of other
living persons
                cannot be registered without their consent-- LA 2(c)
            Celebrity Likenesses
              iff consistently used as a source indicator
                Estate of Presley (DNJ 1981)
              protected features: face, voice, pose
                e.g., ETW (CA6 2003)
              cousin of state-law right of publicity
            Sounds
              examples
                light saber
                Law & Order
                MGM lion
                NBC
                Intel
                LucasFilm THX Deep Note
            Smells
            Colors
              color combinations
                Smack Apparel (2008)
              single colors
                in US, can serve as TMs if claimant can show secondary meaning
                  Qualitex
                In EU, recognized as source indicators only in exceptional circumstances
            Tastes
            Invented Ingredients
            Location of Labels
              Examples
            Fictional characters
              protectable provided they have come to designate a source
                examples
                  Mutt & Jeff
                  Tarzan
                  Mickey Mouse
                  James Bond
              in rare circumstances, treated as inherently distinctive
                example
                  Arthur the Aardvark
                    Brown (EDNY 1999)
            Trade Dress
              Definitions
                Blue Bell (CA5 1989): trade dress of a product is essentially its total image and overall appearance
                  may include such features as size, shape, color or color combinations, texture, graphics, or even particular sales techniques
                Two Pesos: includes the shape and general appearance of the exterior of the restaurant, the identifying sign, the interior kitchen floor plan, the decor, the menu, the equipment used to serve the food, the servers’ uniforms, and other features reflecting on the total image of the restaurant
                McNeil (2007):“It is "the total image or overall appearance of a product, and includes, but is not limited to, such features as size, shape, color or color combinations, texture, graphics, or even a particular sales technique." Rose Art Indus., Inc. v. Swanson, 235 F.3d 165, 171 (3d Cir. 2000).”
              Types
                product packaging
                product configuration
                  evolution of legal treatment
            Buildings
              White Castle (CA6 1937)
            Geographic Terms
              Used as Ordinary TMs
                Identify a particular supplier of a good or service
                Standard distinctiveness hierarchy applies
                Standard grounds for exclusion apply (see below)
              Geographical Indications
                Geographic term used to indicate a region from which products supplied by various firms derive
                US System: Certification Marks
                  example: California Milk
                French System: AOC
                  example: Roquefort cheese
                    images
                    AOC regulations
                    WIPO Registration
                International Regime
                  Lisbon Agreement
                    see "International Framework" above
                    example: Pisco
                  TRIPS Arts. 22-24
                    see "International Framework" above
          Grounds for Exclusion
            Functionality
              Marks are unprotectable if functional
                LA 2(e)
              Tests
                Qualitex (US 1995)
                  This Court consequently has explained that, "[i]n general terms, a product feature is functional," and cannot serve as a trademark, "if it is essential to the use or purpose of the article or if it affects the cost or quality of the article," that is, if exclusive use of the feature would put competitors at a significant non-reputation related disadvantage. [Inwood]
                Disc Golf (CA9 1998)
                  Consider 4 factors (none of which is decisive):
                    (1) whether the design yields a utilitarian advantage,
                    (2) whether alternative designs are available,
                    (3) whether advertising touts the utilitarian advantages of the design, and
                    (4) whether the particular design results from a comparatively simple or inexpensive method of manufacture.
                TrafFix (US 2001)
                  Essential to use or purpose, or
                  Affects cost or quality, or
                  Exclusive use of it would put
competitors at non-reputation
related disadvantage
              Branches
                utilitarian functionality
                  expired utility patent (whose claims cover the design feature at issue) is “strong evidence” of functionality — TrafFix (2001)
                aesthetic functionality
                  Automotive Gold v. VW (CA9 2006)
                    Mere fact that the mark is the benefit consumers want to purchase does not make it functional
                  Louboutin (CA2 2012)
            Conflicts with Existing Marks
              Mark cannot be registered if likely to cause confusion with existing mark
                LA 2(d)
              Mark cannot be registered if it is likely to cause dilution of an existing famous mark
                essential that the existing mark became famous prior to first use of the mark in question
            Fraud
              applicant knowingly makes a false, material representation of fact in connection with application
                Hornby (2008)
            Deception
              deceptive marks cannot be registered
                LA 2(a)
                definition
                  Mark misdescribes the goods to which it is attached
                  Consumers are likely to believe the description is accurate
                  The misdescription is likely to affect consumers’ decisions to purchase the goods
              deceptively misdescriptive marks may be registered iff have acquired SM
                LA 2(e), (f)
                definition
                  Mark misdescribes the goods
to which it is attached
                  Consumers are likely to believe
the description is accurate
              primarily geographically deceptively misdescriptive marks
                now cannot be registered even
if they have acquired SM
                  permissible before 12/9/93 (NAFTA),
but with different definition
                current definition
(California Innovations --
CAFC 2003)
                  (1) mark has as its primary significance a generally known geographic place
                  (2) mark identifies products that consumers are likely to believe mistakenly are connected with that place
                  (3) misdescription will likely be a significant factor in consumers' decisions
                so construed, this rule is superfluous
                  because a mark that meets this definition would be considered "deceptive" in any case
              special rule for geographical indications
                LA 2(a): No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it—(a) Consists of or comprises ... a geographical indication which, when used on or in connection with wines or spirits, identifies a place other than the origin of the goods and is first used on or in connection with wines or spirits by the applicant on or after one year after the date on which the WTO Agreement enters into force with respect to the United States.
            False Suggestion of a Connection
              Hornby (TTAB 2008)
            Disparaging, Immoral or Scandalous
              Old regime
                Disparaging
                  LA 2(a)
                    No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it— (a) Consists of or comprises … matter which may disparage ... persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute
                  Lebanese Arak (2010)
                  Blackhorse (2013)
                  Treatment of ethnic mascots (Clarkson)
                Immoral or Scandalous
                  LA 2(a): No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it— (a) Consists of or comprises immoral … or scandalous matter….
                  Tests
                    McGinley (1981): Does the mark give
offense to the conscience or moral feelings of a substantial portion of the public?
                    Old Glory (1993): consider “seriousness of purpose”
                    Mavety (CAFC 1994): “the PTO must demonstrate that the mark is "shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable; . . . giving offense to the conscience or moral feelings; . . . [or] calling out [for] condemnation.”
                    Wilcher (TTAB 1996): Would the mark be "offensive to the conscience or moral feelings of a substantial composite of the general public"?
                    Boulevard Entertainment (CAFC 2003): Consider changing social mores and sensitivities
                  examples
                    may not be registered
                      Mark depicting a nude heterosexual couple embracing in a fashion that appeared to expose male genitals
                      “Dick Heads’” for Richard Heads' Bar & Restaurant
                      "Bubby Trap" for brassieres
                      image of defecating dog
                      "Jack-Off"
                      "Madonna" for wine
                    may be registered
                      “Moonies” for dolls that drop their pants
                      Pictorial representation of a condom decorated with Stars and Stripes
                      “Black Tail” for adult entertainment magazine featuring African-American women
              Matal v. Tam (SCOTUS 2017)
        II. Acquiring Protection
          Registration
            Not essential for TM protection
              unregistered marks get common-law protection
              unregistered marks are protected by LA 43(a)
            Benefits of Registration
              (a) provides others constructive notice of registrant’s claim
              (b) nationwide constructive use as of date of application
              (c) prima facie evidence of exclusive right to use the mark in connection with the goods or services named in the application
                some courts hold that this merely shifts burden to D to challenge validity
                CA2, CA4, and CA9 hold that registration creates "strong presumption of validity"
              (d) right to bring suit in federal court without regard to diversity of citizenship
              (e) right to invoke aid of Customs Service -- e.g., grey market goods
              (f) more generous remedies -- e.g., treble damages and attorneys fees
              (g) access to incontestability doctrine
            Paths to Registration
              1. Current Use in Commerce (LA 1(a))
                Registration Procedures
              2. Intent-to-Use (ITU) Applications (LA 1(b))
                applicant may secure priority date by filing ITU application, then engaging in use in commerce within 6 months, then filing certificate
                  can get extensions for up to 3 years for good cause
                option available since 11/16/1989
                has led to many speculative filings
                  e.g., "Seal Team 6"
              3. Foreign Applications (LA 44(d))
                nationals of treaty partners or countries providing reciprocity may file US TM application within 6 months of foreign application + intent-to-use statement
                US registration granted upon either:
                  use in commerce in US, or
                  foreign registration granted
                    may maintain US registration for up to 6 years, even without any use in the US or elsewhere
                priority date = date of foreign application
              4. Foreign Registrations (LA 44(e))
                nationals of treaty partners or countries providing reciprocity may file US TM application based upon registration of the mark in applicant's country of origin
              5. Madrid Protocol (LA 66(a))
                see International Framework (above)
                available since Nov. 2, 2003
          Use
            General principle of US TM law: one must use a mark in the US to acquire rights to it
              Common Law
                "Use in Trade"
                  Blue Bell (CA5 1975)
                bona fide use of the mark in connection with offering goods or services to the public
                publicity or solicitation *may* be sufficient if combined with intent to use
              Lanham Act
                "Use in Commerce"
                  interstate commerce
                  intrastate commerce that affects interstate commerce
                    e.g., restaurants with interstate clientele
                  commerce with other countries
                  commerce with "Indian Tribes"
                Unregistered Marks (43(a))
                  Common-law standards apply
                  advertising and promotion is sufficient if (a) occurs within a commercially reasonable time prior to sales or service and (b) is sufficient to create an association among mark, goods/service, and user
                Requirements for Registration
                  pre-1989
                    "token use" was deemed sufficient for registration
                      but exactly how much use was necessary was contested
                    TM Registration Maintenance Programs
                      division among the circuit courts concerning validity
                      Influential opinion in Proctor & Gamble (SDNY 1979) adopts intermediate position
                  post-1989
                    The availability of the ITU option (see above) has prompted courts to tighten "actual use" requirements
                    Goods
                      mark must be placed on goods themselves, containers, displays, tags, or (if infeasible) documents
                      goods must be sold (to customers) or transported (visibly) in commerce
                        e.g., interstate shipments of drugs to clinicians for use in clinical trials is sufficient, even though drugs are not yet approved for sale to public
                      For-profit use is not necessary
                        Nonprofit sales of goods or services sufficient
                    Services
                      mark must be used or displayed in the advertising of services, and the services themselves rendered in commerce
                      advertising for service that has not yet begun is not sufficient
                        Aycock (CAFC 2009) (interpreting both pre-1989 and post-1989 standards)
            Foreign Use
              ordinarily, use of a mark outside the US does not count, even if advertising of the goods or services spills into US
                e.g., Mother's Restaurant (CA2 1998)
              But a few courts define "use in commerce" broadly enough to encompass foreign services provided to US residents
                e.g., International Bancorp. (CA4 2003)
                  sufficient if the foreign company both provides services to visitors from US and advertises in the US
              And some courts will recognize foreign use if it causes the mark to become "famous" or "well known" to US customers
                at common law
                  Maison Prunier (1936)
                  Vaudable (1959)
                  Punchgini (NY 2007)
                under Lanham Act -- circuit split
                  Grupo Gigante (CA9 2004)
                  Punchgini (CA2 2008)
                unclear whether this equivocal recognition of famous marks is sufficient to comply with TRIPS article 16.2
          Priority Fights
            General Principle: First in Time, First in Right
            When priority is based on use, geographic scope of right includes:
              zone of actual use
              zone where one has established a reputation or business presence
              natural zone of expansion
                contested doctrine
                zone usually drawn narrowly
              zone in which D deliberately trades on P's reputation
            When priority is based on US registration, geographic scope includes entire nation
              Constructive notice
              Constructive nationwide use
                retroactive to date of application
              Rights of pre-registration senior users
                prevail over registrant
                  registration invalid if someone else has previously used the mark in commerce
                but PTO enjoys broad discretion under LA2(d) to grant concurrent registrations when senior user's use antedates application and no consumer confusion would result
              Rights of pre-registration junior users
                junior user who has employed the mark continuously and in good faith gets "limited area" defense
                  right to continue using the mark in the area where JU was using the mark at the time of registrant's application
                  LA 33(b)(5)
              Rights of post-registration junior users
                post-registration innocent junior user may continue to use mark if consumer confusion is unlikely; must stop when registrant expands operations into that area
                  spectrum of judicial interpretations
                    leading case: Dawn Donut (CA2 1959)
                      registrant had long used "Dawn" for donuts in various parts of the country, but not Rochester
                      junior user adopts "Dawn" without actual knowledge of P's use
                      no "present likelihood" of expansion into Rochester
                      thus no consumer confusion
                    initially, all circuits and some state courts follow Dawn Donut
                    CA3 adopted especially strict (pro-D) interpretation
                      "Holiday Inn" in Virgin Islands
                      P cannot secure an injunction until P actually begins construction in the junior user's region
                    A few courts are not drifting away from the rule, particularly with respect to goods marketed over the Internet
                      Carmax (CA6 1999)
                        likelihood of entry is just one of eight factors to determine likelihood of confusion
                      Rebel Debutante (NC 2011)
                      Members First (Pa.)
                      Boldface Licensing (CD Cal. 2013)
                  meanings of "innocent"
                    majority rule: junior user is unaware of senior user's use
                    minority rule: Junior user must not have "designs inimical to the interest of the first user"
                      GTE (CA10 1990)
            Tacking
              If claimant's use of mark A precedes claimant’s use of mark B, claimant can "tack" use of A to use of B iff the two marks appear indistinguishable to the public
        III. Losing Protection
          Abandonment
            Nonuse
              Traditional Rule:
                Abandonment requires both nonuse and intent to abandon
                  See Gold Seal Associates (SDNY 1932)
                  Parallels CL doctrine of abandonment for personal property
                    need both deliberately leaving the object behind and intent to abandon
                  lapse of time without use may be evidence from which intent to abandon may be inferred, the strength of the inference being dependent upon the period of discontinuance, the cause of it, and other factors
                  But intent to relinquish must be shown
                Applied: As long as P is making efforts to keep the business going, no intent to abandon
              Current Rule:
                LA 45
                  A mark shall be deemed to be "abandoned" if either of the following occurs:
(1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. "Use" of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark….
                Abandonment requires two things:
                  Nonuse
                  Intent not to resume
                3 years of nonuse (increased from 2 years per TRIPS) of federally registered mark constitutes prima facie abandonment
                  but it can be rebutted by proof of intent to resume use
                Cases
                  Silverman (CA2 1989)
                  Exxon (CA5 1983)
                  California Cedar (CA2 1984)
            Changes in Product or Service
              transferring TM to different product or service is permissible if the old and new versions are "closely related"
                test: would consumers think that the new product is coming from the same source
              sudden and substantial change in quality or composition may result in abandonment
              but gradual and incremental changes in quality or composition are acceptable
                rationale: consumers expect them
                e.g., Marilyn Neutraceuticals (CA9 2009)
          Genericide
            Test: If the principal significance of a mark to the public is to indicate the nature or class of an article, rather than its source (i.e., the person or organization that produces it), then it’s generic
              it had lost its distinctiveness
              other producers must be allowed to use it
              test refined by §1064, reversing the AntiMonopoly decision (CA9 1982)
                “A petition to cancel a registration of a mark, stating the grounds relied upon, may, upon payment of the prescribed fee, be filed as follows by any person who believes that he is or will be damaged, … (3) At any time if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, …. If the registered mark becomes the generic name for less than all of the goods or services for which it is registered, a petition to cancel the registration for only those goods or services may be filed. A registered mark shall not be deemed to be the generic name of goods or services solely because such mark is also used as a name of or to identify a unique product or service. *The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it has been used.*”
                obscure language, but the gist is that, to be distinctive, a mark need not be attractive to consumers because they know and trust the manufacturer
            Circumstances that affect likelihood of genericide
              Things to avoid:
                TM owner uses the mark in denominative sense
                TM owner uses the mark as noun or verb, rather than as an adjective, attached to some generic term
              Names of patented goods, when the patent expires
                Kellogg (US 1938) (Shredded Wheat) seems to stand for the general proposition that they become generic automatically
                But courts do not generally so hold
                  e.g., Bayer: it’s a factor, but not decisive
              Efforts of the TM owner
                trial court in the Thermos case chastises King-Seeley for not exercising “due diligence” in the period between 1923 and early 1950s to prevent generic use of Thermos in the nontrade publications
                Moore, however, suggests that it’s irrelevant
            Options for a TM holder whose mark have become generic
              no protection under §32 or §43(a)
              courts retain and frequently exercise power to craft tailored remedies
                e.g., to require Aladdin (for a while) to insert various disclaimers, to only use thermos in lower case, etc.
                see also Learned Hand’s detailed injunction in the aspirin case
              Some courts permit the TM holder to rely on unfair competition
                Intentional passing off
          Assignments
            TMs may be assigned
              cf. prior appropriation in water law
            Limitations
              to be assignable, TMs must be associated with an ongoing use in commerce
                abandoned marks may not be assigned
                ITU applications may not be assigned
                  attempt to do so voids the application
              No assignments in gross
                in most countries, TMs can be assigned in gross
                in USA, transfers in gross are commonly held to constitute abandonment
              but TMs may be assigned along with other assets
                Some courts stick to older US rule: must be accompanied by transfer of physical assets -- like machines, customer lists, etc.
                Others permit assignment of the mark if accompanies transfer of "goodwill"
                  goodwill = "favorable consideration shown by purchasing public to goods known to emanate from a particular source" (Rogers 1914)
                    reasonable expectation of future patronage
                  A few courts are satisfied by mere recitation of transfer of good will
                  others construe to require maintenance of quality controls during transfer -- and reasonable time thereafter
                    Platt, "Good Will Enduring" (2009)
                  Some say that no “goodwill” is transferred if the assignee plans to use the mark on a new and different product
                    goodwill consists of the public’s faith that the product will remain good; n.a., where the product is changed
          Licenses
            Licensing of the mark to others without controlling the quality of their products results in abandonment
              rationale: otherwise the licensees will be able to reduce the quality, and the public will be deceived
            But licensing accompanied by effective controls over quality does not result in abandonment
              Range of views concerning the necessary quality controls
                Sufficient if there’s evidence that licensor was familiar with and relied upon licensee’s quality controls
                Close working relationship is also sufficient
                Judge Hand would impose more stringent requirements re effective policing than the rest of the CA2
      Applications for Fintech Trademarks are rising rapidly
        Fintech_Trademarks.pptx
      Selected TM Controversies
        Alibaba v. Alibabacoin (SDNY 2018)
        Telegram Messenger Inc. v. Lantah, LLC (ND Cal 2018)
          Use of “GRAM” for a cryptocurrency
      Bottom line: trademark protection for fintech innovations is now easy to obtain, and highly valuable to innovators
        Success of fintech businesses is highly dependent on lead time and branding, which TM shields can help supply
        In light of common vocabulary, fintech businesses are unusually vulnerable to consumer confusion with respect to the source of services
    Trade Secrets
      History of TS Protection for Software
        Companies sell copies of object code, keep source code secret
        Courts rule that public distribution of object code does not forfeit TS protection, so long as source code is hard to reverse engineer
          Data General v. DCI (Del. 1971)
          Telex v. IBM (CA10 1975)
          Q-Co Industries (SDNY 1985)
        Appropriate to an era in which software is custom-made by vertically integrated hardware suppliers for large commercial customers
        Limitations of this Approach
          Gradual improvement of decompilers makes possible reverse engineering
          No protection against “piracy” of object code
          Limited protection against “downstream” consumers
          Consumers’ demand for access to source code
      Factors limiting usage
        Increased regulatory disclosure
        Vertically integrated financial firms displaced by independent IT firms
          See Lerner et al.
      Only modestly helpful to fintech innovators
        TS protection can supply shields for customer lists
        TS can be used to curtail employee defections
          But divergence of software industries in Boston and Silicon Valley suggests that, in the aggregate, this is a hazardous strategy
    Database Protection
      Available in Europe, Not US
      Largely irrelevant from business standpoint
  Fintech
    Definition
      Technology used to support financial services
    History
      Before 1850
        Needs of emerging <u>national</u> financial systems spur new technologies
        Major Technological Innovations
          Written records
          Currency
          Abacus
          Telegraph (1833)
      1850-1967
        Sporadic financial <u>globalization</u>
        Major Technological Innovations
          Transatlantic cable (1866)
          Credit cards (1950s)
          Fax machine (1964)
        Fintech_Stage2.pptx
      1967-2008
        <u>Digitization</u> of traditional financial functions
        Major Technological Innovations
          ATM (1967)
          Financial calculators (1967)
          Society of Interbank Financial Telecommunications (1973)
          Spreadsheet apps (1977)
            Spreadsheets.pptx
          Bloomberg terminals (1980s)
            Provides access to real-time data on financial markets and ability to trade securities online
            Bloomberg.pptx
          Computer-driven trading of securities (1980s)
            Contributed to the crash of 1987
          Online account checking (1995)
      2008-2022
        <u>Democratization</u> of financial functions
          Precipitating factors
            Global financial crisis (2008)
              Led to decline in faith in traditional financial institutions
            Finacncial_Crisis.pptx
            Tightening of regulations on traditional financial institutions
              Dodd-Frank in US
              Basel 3
        Major Technological Innovation: Blockchain
          Blockchain.pptx
    Scale
      Fintech_Scale.pptx
    Geography
      Pioneers = USA and China
        In China, fintech is dominated by large companies (Alibaba, JD, Tencent)
        In USA, fintech is more dependent on startups and VC funding
      Europe is the slowest region to develop or adopt initiatives, but is now accelerating
        Within Europe, UK leads
      In several respects, developing countries are ahead of Europe
      Fintech_Geography.pptx
    Fields
      1. Banking
        Mobile banking
          Mobile_Banking.pptx
        P2P Lending
          P2P_Lending.pptx
        Crowdfunding
        Payment systems
          Paypal
          ApplePay
          Venmo
          Affirm
          PISPs in Europe
            Payment_Systems.pptx
      2. Investing
        Initial Coin Offerings
          ICOs.pptx
      3. Insurance
        Common features
          Fully online businesses result in lower costs
          AI + more diverse sources of information results in more precise estimates of risk -- and thus more tailored policies
        Examples
          Ethos
            (AI underwriting for life insurance)
          Hippo Insurance
            Alternative information sources for homeowners’ insurance
            Monitoring systems to reduce risks
          Lemonade
            Renters’ insurance
            Homeowners’ insurance
          Next Insurance
            Liability insurance for small businesses
        Illustrations
          finech_insurance.pptx
      4. Currencies
        Currencies.pptx
      5. Smart Contracts
        Self-executing agreement in digital form
        Whereas traditional contracts create legal obligations, which require state intervention to enforce, “smart contracts” enforce obligations automatically
          (Potential state involvement through rescission)
        Applications
          Bets
          Securities Trading
          Mortgages
          Taxes on Transactions
      6. Financial security
        Fraud detection services
          Fraugsters
        Investment
      7. RegTech
        Provocations
          Increased regulatory burdens in wake of global financial crisis of 2008
          Increased penalties for breaches
          Decreasing costs of monitoring digital financial transactions
        Examples
          Compliance with “Know Your Customers” (KYC) regulations, designed to curb money laundering and terrorism
          Compliance with rules governing capital requirements, risk management, liquidity
        Paradigm shift?
          RegTech.pptx
      8. Art
        Non-fungible Tokens
          NFTs.pptx
    Social Welfare
      Benefits
        1. Reduced Transaction Costs
        2. Increased Access to Credit
          P2P_Lending.pptx
        3. Increased Security
        4. Increase competitiveness
          Facilitate disaggregation of business
            Coase, “Theory of the Firm”; Robert Clark
            OECD: “The standard theory of the firm suggests that in order to carry out a transaction in a market it is necessary to discover who it is that you wish to deal with, to conduct negotiations leading up to a bargain, to draw up the contract, to undertake the inspection needed to make sure that the terms of the contract are being observed, and so on (Coase). The development of the digital platform business model has reduced search and information costs, and while the costs of incomplete contracting are likely to remain significant (Grossman, Hart & Moore), blockchain technology might be expected to reduce the costs of contract enforcement. This might lead firms to outsource more, and to outsource new, previously core functions to specialised, and perhaps smaller, firms (even individuals). This could therefore create new and potentially highly competitive markets in a similar way to the disruption cause by the digital platform business model.”
          Reduce barriers to entry
            Cong 2018
          Provoke innovation by incumbents
        5. Health Benefits
          Minimize person-to-person contacts in financial transactions
            Arner 2020
          Augment databases that can sustain sophisticated diagnostic systems
        6. Benefits to Artists
          Enable digital artists to monetize creations
      Costs
        1. Network effects can produce dominant platforms
          Direct Network Effects: value of product is tied to the number of other people (or institutions) who have and use it
            telephone
            Fax machine
            windsurfer
            Digital currency
              e.g., Libra
          Indirect Network Effects: value of product rises if third parties emerge to supply ancillary products or services
            some happen at the level of technology – affect the industry as a whole
              e.g., generic charging stations for electric cars
            some happen through good management and therefore benefit a firm
              e.g., proprietary charging stations (Tesla)
              e.g., “friends and family” plan
        2. Facilitate fraud and exploitation
          Concealed risks
            Lerner et al. (2020): “ Reflecting these doubts, recent academic studies have focused on the development and diffusion
of what Krugman (2007) terms the “alphabet soup of C.D.O.’s and S.I.V.’s, R.M.B.S. and A.B.C.P.”
              “A rich empirical literature has examined the frequently deleterious consequences of the
innovative financial securities in the run-up to the GFC.
              “Similarly, theoretical work has highlighted concerns about financial innovation and its impact:
                important papers include Biais, Rochet, and Woolley (2015), Caballero and Simsek (2013), and Thakor (2012), as well as the prescient arguments of Rajan (2006).
                In one such paper, Gennaioli, Shleifer, and Vishny (2012) adapt the standard depiction of financial innovators catering to investors’ desire for certain cash flow patterns (Allen and Gale, 1994; Ross, 1976). In their variant, financial intermediaries meet investor tastes by engineering securities perceived to be safe but actually riven with hidden risks. When these weaknesses subsequently become apparent, the valuations of the novel securities drop sharply and social welfare suffers.”
          Unregulated ICOs
            ICO_Regulation.pptx
          Fraud in COVID loan programs in US
            Paycheck Protection Program distributed $793B in loans to small businesses, 2020-2021
            Early rounds dominated by banks; gradually displaced by Fintech lenders
            Griffin et al. (2022) estimate that 1.4M loans ($64.2B in value) are “questionable”
              Large and long-standing Fintech lenders have lower rates of presumptive fraud than new entrants
        3. Facilitate criminal activity
          Money laundering
          Drug sales
            Bitcoin_Crimes.pptx
        4. Threats to Privacy
          Byproduct of the widespread distribution of information necessary to achieve decentralized consensus
            Cong 2018
        5. Causes environmental damage
          Cryptocurrency mining consumes large amounts of electricity and thus contributes to climate change
            Bitcoin_Climate.pptx
          Impending transition from “proof of work” authentication to “proof of stake,” if it occurs, will radically reduce environmental costs