Archive for August, 2016

 

PTAB Finds Claims Directed to Point-of-Sale System for Printing Coupons for a Third Party to be Patent-Eligible Subject Matter

Tuesday, August 30th, 2016

In a recent Patent Trial and Appeal Board (PTAB) decision, the PTAB reversed an Examiner’s rejection of claims that recited utilizing a retailer’s point-of-sale (POS) system that printed coupons for a third-party’s unrelated goods or services  under 35 U.S.C. § 101 for being directed to patent-ineligible subject matter.

The PTAB identified claims 14 and 43 as being representative of the claimed subject matter:

14. A system for distributing third-party coupons by a retailer on the Internet, the Internet including a computer with a monitor and a printer, the third-party coupons being associated with goods or services of a third-party retailer, which goods or services are unrelated to the goods or services of the retailer and wherein the third-party retailer purchases advertising from the retailer, the system comprising:
a server configured to:
cause a graphical user interface (GUI) to be displayed on the monitor;
display an advertisement associated with a third-party coupon of the third-party retailer;
display a threshold value in the GUI;
calculate a value of a transaction based on a purchase of goods or services made from the retailer by a consumer;
display the value of the transaction in the GUI; and
enable the computer to print the third-party coupon when the value of the transaction exceeds the threshold value;
wherein the third-party coupon is redeemable for the goods or services of the third-party
retailer; and
wherein goods or services of the third-party retailer are unrelated to the goods or services sold by the retailer and therefore are unpurchaseable from the retailer.
43. A checkout system for a retail outlet for distributing third- party discount coupons associated with one or more third-party retailers comprising:
a printer; and
a point-of-sale register having a processor configured to:
add prices of items purchased by a shopper to reach a total sale ST;
compare the total sale ST of the shopper to a threshold sale value T; and
print one or more third-party coupons for use with a respective third-party retailer to purchase goods or services unrelated to the goods or services offered by the retail outlet if the total sale ST of the shopper exceeds the threshold sale value T.
At step one of the Alice/Mayo framework, the Examiner found that the claims were directed to the abstract idea of distributing coupons by a retailer for the purpose of enhancing revenue, and the Appellant did not dispute the Examiner’s characterization. However, during its analysis, the PTAB disagreed with the Examiner and found that the Examiner’s characterization of the abstract idea as being too broad.  Instead, the PTAB found that the claims were directed to “much more limited systems and methods distributing only coupons redeemable at a third-party retailer for goods that were unpurchaseable at the issuing retailer and/or are unrelated to the goods or services offered by the issuing retailer, and then only upon the occurrence of certain conditions.”

 

Regarding step two, the Examiner stated “[t]he steps or acts performed (utilizing a processor) in independent method claims 27 and 50 are not enough to qualify as ‘significantly more’ than the abstract idea itself, since the claims are a mere instruction to apply the abstract idea. Furthermore, there is no improvement to another technology or technical field, no improvements to the functioning of the computer itself, and no meaningful limitations beyond generally linking the use of an abstract idea to a particular technical environment, and the claims require no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional.”  The Appellant argued that, in the prior art, retailers commonly distributed coupons to enhance sales of goods or services provided by the retailer.  The Appellant contrasted the prior art with the claimed invention by stating the claimed subject matter:
entails systems and methods that enable a retailer to distribute coupons in a different way. For example, the retailer’s point- of-sale (POS) register distributes a so-called third-party coupon that is redeemable for a discount on the goods or services sold by some other retailer. These goods or services of the third- party retailer are unrelated to the goods or services offered by the retailer distributing the coupon. The retailer’s POS register is configured to print this coupon for a shopper when the register determines that the value of the goods or services purchased by the shopper from the retailer exceeds a threshold value. This enhances the retailer’s revenue because the shopper increases his or her purchase from the retailer in order to receive discount coupons for a third-party retailer.
The Appellant further argued that the claims meet the specific threshold set forth in step two because the claims “add specific limitations to what is known in the art” because:
[i]t is unconventional for a retailer’s POS register to print a coupon for the purchase of a third-party retailer’s unrelated goods or services. It is especially unconventional for the retailer’s POS register to condition doing this on a shopper’s total purchase from the retailer exceeding a certain threshold sale value. None of this is routine or well understood. In fact, twelve years of prosecution reveals that nothing in the prior art teaches these additional features or even renders them obvious. Nothing of record demonstrates that this sort of activity has ever been previously engaged in by those in the field.
In its analysis, the PTAB relied upon the specific limitations of the claims to find that the claims do not preempt the “abstract idea” as defined by the Examiner.  To support this conclusion, the PTAB related upon the 2014 Interim Guidance on Patent Subject Matter Eligibility to identify that “specific limitations other than what is well understood, routine and conventional in the field, or adding unconventional steps that confine the claim to a particular useful application” qualify under the “significantly more” exception of step two.  The PTAB went on to state that these guidelines require that if an Examiner decides the limitations do not add “significantly more” to the claim, the Examiner must identify the limitations and explanations provided as to why this is the case.  The PTAB found that the Examiner failed to provide persuasive arguments or evidence as to why the limitations were not “significantly more” (i.e., the argument “are generic computer functions (e.g. adding, comparing and printing) that are well-understood, routine and conventional activities previously known to the industry” did not suffice.)
Based upon these findings, the PTAB reversed the Examiner’s rejections of the claims as being directed to patent-ineligible subject matter finding that the claims did add “significantly more” to the abstract idea.

The U.S. Supreme Court Makes Opinion Letters Relevant Again

Tuesday, August 30th, 2016

Patent owners may wish to revisit using opinion letters. Since 2007, opinion letters in patent cases have not been as prevalent as they were previously. That is, until the U.S. Supreme Court decided Halo Electronics, Inc. v Pulse Electronics, Inc. in June of this year. In Halo, the Supreme Court replaced the Federal Circuit’s strict Seagate test with a test that makes it easier for patent owners to obtain enhanced patent damages for infringement.

Section 284 of the Patent Act provides that a district court “may increase the damages [for patent infringement] up to three times the amount found or assessed.” The Federal Circuit ruled in 2007 in Seagate that enhanced damages may be awarded to a prevailing patent owner that proves infringing conduct was “willful.” However, the recent Halo decision lowered a patent owner’s burden of proof for showing infringement by eliminating a showing of “willfulness” and now requires the Federal Circuit to defer more to a district Court’s decision whether to enhance damages. When deciding if enhanced damages are appropriate, the Supreme Court directed the district courts to more subjectively “…channel the exercise of discretion, limiting the award of enhanced damages to egregious cases of misconduct beyond typical infringement.” Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. ___, 15 (2016).

Under the Halo standard, an opinion letter written by patent counsel can be an effective tool for avoiding “egregious cases of misconduct beyond typical infringement.” Some examples of opinion letters useful in this regard can include invalidity opinions, non-infringement opinions, or right-to-use opinions. In-house counsel and patent owners should seriously consider using opinion letters more often in the aftermath of Halo in order to provide convincing evidence against an allegation of egregious conduct.

Court Finds That “Common Sense” May Not Be Enough

Tuesday, August 23rd, 2016

The Federal Circuit recently reversed a Patent Trial & Appeal Board (“Board”) decision relying on “common sense” to invalidate a patent. In Arendi S.A.R.L. v. Apple Inc., Google Inc., Motorola Mobility LLC (Fed. Cir. Aug. 10, 2016), the Court held that the Board erroneously applied the law on permissible use of common sense, and that the Board cannot rely solely on common sense to invalidate a patent. The Court explained that “common knowledge and common sense” cannot be a substitute for “reasoned analysis and evidentiary support” in the Board’s obviousness analysis. Specifically, the Court reasoned that the Board should not rely on common sense to supply a missing claim limitation unless the missing limitation is “unusually simple and the technology particularly straightforward.” Further, where a “missing limitation goes to the heart of an invention,” the use of common sense must be “supported by evidence and a reasoned explanation.”

The Arendi decision raises three important considerations for patentees. First, the decision gives a little ground back to the patentee in regard to overcoming the prior art. The Court appears to be taking a step back after the Supreme Court’s ruling in KSR v. Teleflex, which suggested that conclusory analysis can take the place of evidence. This decision favors patent owners by recognizing that the increasingly prevalent conclusory Board findings are likely to face strong challenge on appeal.  Second, this case cautions petitioners to limit arguments based on common sense, and instead offer thoroughly-reasoned argumentation. Finally, this case serves as a reminder of those appeal strategies that are more likely to find success. The Board is rarely overturned on appeal, most likely because the Board’s factual findings do not necessarily need to be correct, just supported by evidence. Thus, a petitioner will rarely get a reversal based on an erroneous factual conclusion. However, petitioners that can identify erroneous application of the law are more likely to find success on appeal.

3D PRINTING AND PATENT INFRINGMENT

Monday, August 15th, 2016

         Three-dimensional (3D) printing has become a hot topic in the past few years. 3D printers allow users to produce prototypes and custom artifacts (e.g., prosthetics, patient-specific anatomical models, replacement parts, etc.) with quick turnaround times, and at relatively low cost for single-item production. Moreover, 3D printers are becoming less expensive, making them accessible to everyday consumers. With some units priced in the range of a few hundred dollars, 3D printers may become a common household item.

          However, 3D printing also poses some challenges. The use of 3D printing to produce a working firearm has been heavily discussed in the media and has resulted in specifically tailored law (e.g., California’s AB857, requiring “a person who manufactures or assembles a firearm to first apply to the department for a unique serial number or other identifying mark”). Yet even with changes to law like California’s AB857, enforcement is likely to be difficult if not nearly impossible.

          The difficulty of tracking down individuals who print 3D artifacts illegally also raises concerns for businesses trying to protect their patented products. Because it is often impractical to bring legal action against individuals that personally make or use knockoffs of patented products, patent owners generally go after the manufacturers, suppliers, and/or distributors of the knockoff products. So, how can a company prevent infringers from making and using its products at home, through the use of a 3D printer? The task is much more difficult, particularly since CAD files used to make a 3D printed artifact are generally not covered by any patent rights attached to the artifact itself.

          The USPTO hosted a conference on June 28, 2016 to take a closer look at these issues. One of the areas considered by the USPTO was the application of induced and contributory patent infringement doctrines to prevent unauthorized distribution and download of CAD files for infringing products. Induced and contributory infringement both require knowledge on the part of the inducer or contributory infringer (see, e.g., 35 U.S.C. §§ 271(b) and (c)), hence it is more important than ever for patent owners to be vigilant. Patent owners should periodically monitor sites like http://www.thingiverse.com/ that allow users to upload and download CAD files for 3D printing, and should promptly report CAD files for any of their patented products. Any supplier (e.g., website or file exchange) of CAD files that continues to do so after having knowledge that the CAD files are for making a patented product likely fits the definition of an “infringer” according to 35 U.S.C. § 271(b), “whoever actively induces infringement of a patent shall be liable as an infringer.” While it is not practical in most cases to go after the individuals making 3D prints of patented products at home, patent owners can take steps to prevent websites and file exchanges from providing CAD files and may be able to hold them liable if they fail to do so.